Show All References

In an older version of EndNote, after inserting one or more highlighted references with the Insert Citation toolbar button in Word, the reference list remained unchanged. Now, in X4, it is altered to display only the selected citations and I must click on Show All References after every such insertion. There must be a simple way to change this behavior, but I haven’t found it and I haven’t seen it discussed.

You should update to X4.0.2 which no longer has that quirk.  You do this from the help update menu.