When inserting a hyperlink to a position such a heading within a document it works while the document is open. After closing the document the target is replaced by a toc entry which does not point to anything in the document, rendering the hyperlink useless.
.doc documents are affected by the bug.
Created attachment 81949 [details] test.doc file (works fine for me)
Could not reproduce this on OS X 10.8.4 with LO 4.1.0.1. Neither with Ubuntu 13.04. Attaching my test.doc. Proshka: Could you please attach your test document? After that set the bug to UNCONFIRMED.
Created attachment 81963 [details] Test.doc with TOC entry
NOT reproducible on Windows 7 with Version: 4.1.2.3 Build ID: 40b2d7fde7e8d2d7bc5a449dc65df4d08a7dd38 I followed your steps, but I don't get any broken links or toc entries. So closing this as WORKSFORME. If it still doesn't work for you please reopen the bug and give a detailed step by step description how your bug is reproducible.