This feature is working for me. Here is an actual example from my WP:
As it appears in the Visual Tab:
[ref]Educational woodworking for home and school, by Joseph C. Park | E-book [/ref]
“E-book” shows as the link.
As it appears in the HTML Tab:
[ref]Educational woodworking for home and school, by Joseph C. Park | <a href="https://www.archive.org/details/educationalwood00park">E-book</a> [/ref]
I create the ref tags in Visual and add links normally through the toolbar. Check to make sure your links appear similar to the above in both tabs.
I have had the parsing work inconsistently before publishing in the preview. I’m not sure if that’s a browser issue or not. You might want to try publishing the page to see if it is really working.
I haven’t used this on a post yet only a page.