MobileSheets determines the output location for the file (and the title to use for the song) based on the filename. If that output location contains an existing PDF with the same name, then MobileSheets assumes it should update the existing song. If you rename a song in MobileSheets, this will change the directory used for the file (this was added semi-recently due to user requests that the folders match the song titles). However, that will then break the "update matching song" option if the filename doesn't match the song title. If this is a feature you need to rely on, then I would recommend keeping the file names the same as the song titles and not renaming the song titles. Then everything should match up without issue. Alternatively, if you rename a song, rename the file you will import to match the song title that MobileSheets will generate.
A simpler approach is to go to Settings->Storage and uncheck "Use Subdirectory Per Song". Then there are no longer folder issues and all of your files will just be matched up by name (and the song title is irrelevant). This does require you to uniquely name all of your files though. You also will need to either backup your library and restore it to reassign the folders, or just clear your library and reimport your files (if you aren't worried about losing any important information like annotations).
Mike
A simpler approach is to go to Settings->Storage and uncheck "Use Subdirectory Per Song". Then there are no longer folder issues and all of your files will just be matched up by name (and the song title is irrelevant). This does require you to uniquely name all of your files though. You also will need to either backup your library and restore it to reassign the folders, or just clear your library and reimport your files (if you aren't worried about losing any important information like annotations).
Mike