See also: Updates to creating a course step
When you edit an existing course step that is of the reference type you will find many changes to allow you to see and edit the Library Item content for this step right there without have to go elsewhere to find it or edit it. :)
this is what you will see:
the content of the library item is shown right there
if you wish to change the library item to a different (existing) one
click "Unlock" (this is to prevent accidental changing of the Library Item - you have to unlock it to confirm you really did want to change it)
select another existing library item form the drop down list
scroll down to the bottom of the page and click "Update reference" to save your changes
but wait, there's more!
if you select "View" it will take you to the Library Item page for further details
if you select edit you can edit the Library Item right there on the page
if you select "New" you can create a new Library Item for this step, right there
Note: If the Library item is shared and used in other steps, editing it here will edit it for all other steps - which may not be a good thing to do. In this case the "Edit" link does not show but there is a link to a page that will show each course and step using this item - from there you can decide to edit it or not.
