Having sheets named Sheet1, Sheet2, Sheet3 etc. any reference from Sheet2 to Sheet1 or from Sheet3 to Sheet2 refers to the _previous_ sheet. When you copy this reference to the first sheet, then there is no previous sheet which is why you get #REF!.X1 Any absolute reference to $Sheet1 refers to the first sheet. Since there is always a first sheet, this reference can be copied anywhere. When you copy an absolute reference to $Sheet3 (3rd sheet) into a document with only 1 or 2 sheets you get #REF!.X1 because there is no third sheet.
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