diff --git a/cms/djangoapps/contentstore/signals/handlers.py b/cms/djangoapps/contentstore/signals/handlers.py
index 5f6fa2124678..5635d4655622 100644
--- a/cms/djangoapps/contentstore/signals/handlers.py
+++ b/cms/djangoapps/contentstore/signals/handlers.py
@@ -12,10 +12,17 @@
 from django.dispatch import receiver
 from edx_toggles.toggles import SettingToggle
 from opaque_keys.edx.keys import CourseKey
-from openedx_events.content_authoring.data import CourseCatalogData, CourseData, CourseScheduleData, XBlockData
+from openedx_events.content_authoring.data import (
+    CourseCatalogData,
+    CourseData,
+    CourseScheduleData,
+    LibraryBlockData,
+    XBlockData,
+)
 from openedx_events.content_authoring.signals import (
     COURSE_CATALOG_INFO_CHANGED,
     COURSE_IMPORT_COMPLETED,
+    LIBRARY_BLOCK_DELETED,
     XBLOCK_CREATED,
     XBLOCK_DELETED,
     XBLOCK_UPDATED,
@@ -38,7 +45,11 @@
 from xmodule.modulestore.exceptions import ItemNotFoundError
 
 from ..models import PublishableEntityLink
-from ..tasks import create_or_update_upstream_links, handle_create_or_update_xblock_upstream_link
+from ..tasks import (
+    create_or_update_upstream_links,
+    handle_create_or_update_xblock_upstream_link,
+    handle_unlink_upstream_block,
+)
 from .signals import GRADING_POLICY_CHANGED
 
 log = logging.getLogger(__name__)
@@ -287,3 +298,16 @@ def handle_new_course_import(**kwargs):
         force=True,
         replace=True
     )
+
+
+@receiver(LIBRARY_BLOCK_DELETED)
+def unlink_upstream_block_handler(**kwargs):
+    """
+    Handle unlinking the upstream (library) block from any downstream (course) blocks.
+    """
+    library_block = kwargs.get("library_block", None)
+    if not library_block or not isinstance(library_block, LibraryBlockData):
+        log.error("Received null or incorrect data for event")
+        return
+
+    handle_unlink_upstream_block.delay(str(library_block.usage_key))
diff --git a/cms/djangoapps/contentstore/tasks.py b/cms/djangoapps/contentstore/tasks.py
index 68e0c7827948..c2803f3e2751 100644
--- a/cms/djangoapps/contentstore/tasks.py
+++ b/cms/djangoapps/contentstore/tasks.py
@@ -67,6 +67,7 @@
 from common.djangoapps.util.monitoring import monitor_import_failure
 from openedx.core.djangoapps.content.learning_sequences.api import key_supports_outlines
 from openedx.core.djangoapps.content_libraries import api as v2contentlib_api
+from openedx.core.djangoapps.content_tagging.api import make_copied_tags_editable
 from openedx.core.djangoapps.course_apps.toggles import exams_ida_enabled
 from openedx.core.djangoapps.discussions.config.waffle import ENABLE_NEW_STRUCTURE_DISCUSSIONS
 from openedx.core.djangoapps.discussions.models import DiscussionsConfiguration, Provider
@@ -1466,3 +1467,23 @@ def create_or_update_upstream_links(
     for xblock in xblocks:
         create_or_update_xblock_upstream_link(xblock, course_key_str, created)
     course_status.update_status(LearningContextLinksStatusChoices.COMPLETED)
+
+
+@shared_task
+@set_code_owner_attribute
+def handle_unlink_upstream_block(upstream_usage_key_string: str) -> None:
+    """
+    Handle updates needed to downstream blocks when the upstream link is severed.
+    """
+    ensure_cms("handle_unlink_upstream_block may only be executed in a CMS context")
+
+    try:
+        upstream_usage_key = UsageKey.from_string(upstream_usage_key_string)
+    except (InvalidKeyError):
+        LOGGER.exception(f'Invalid upstream usage_key: {upstream_usage_key_string}')
+        return
+
+    for link in PublishableEntityLink.objects.filter(
+        upstream_usage_key=upstream_usage_key,
+    ):
+        make_copied_tags_editable(str(link.downstream_usage_key))
diff --git a/cms/djangoapps/contentstore/views/tests/test_clipboard_paste.py b/cms/djangoapps/contentstore/views/tests/test_clipboard_paste.py
index 3b39f2918a36..3fae9d996fd2 100644
--- a/cms/djangoapps/contentstore/views/tests/test_clipboard_paste.py
+++ b/cms/djangoapps/contentstore/views/tests/test_clipboard_paste.py
@@ -6,6 +6,13 @@
 import ddt
 from opaque_keys.edx.keys import UsageKey
 from rest_framework.test import APIClient
+from openedx_events.content_authoring.signals import (
+    LIBRARY_BLOCK_DELETED,
+    XBLOCK_CREATED,
+    XBLOCK_DELETED,
+    XBLOCK_UPDATED,
+)
+from openedx_events.tests.utils import OpenEdxEventsTestMixin
 from openedx_tagging.core.tagging.models import Tag
 from organizations.models import Organization
 from xmodule.modulestore.django import contentstore, modulestore
@@ -393,10 +400,16 @@ def test_paste_with_assets(self):
         assert source_pic2_hash != dest_pic2_hash  # Because there was a conflict, this file was unchanged.
 
 
-class ClipboardPasteFromV2LibraryTestCase(ModuleStoreTestCase):
+class ClipboardPasteFromV2LibraryTestCase(OpenEdxEventsTestMixin, ModuleStoreTestCase):
     """
     Test Clipboard Paste functionality with a "new" (as of Sumac) library
     """
+    ENABLED_OPENEDX_EVENTS = [
+        LIBRARY_BLOCK_DELETED.event_type,
+        XBLOCK_CREATED.event_type,
+        XBLOCK_DELETED.event_type,
+        XBLOCK_UPDATED.event_type,
+    ]
 
     def setUp(self):
         """
@@ -477,6 +490,16 @@ def test_paste_from_library_read_only_tags(self):
             assert object_tag.value in self.lib_block_tags
             assert object_tag.is_copied
 
+        # If we delete the upstream library block...
+        library_api.delete_library_block(self.lib_block_key)
+
+        # ...the copied tags remain, but should no longer be marked as "copied"
+        object_tags = tagging_api.get_object_tags(new_block_key)
+        assert len(object_tags) == len(self.lib_block_tags)
+        for object_tag in object_tags:
+            assert object_tag.value in self.lib_block_tags
+            assert not object_tag.is_copied
+
     def test_paste_from_library_copies_asset(self):
         """
         Assets from a library component copied into a subdir of Files & Uploads.
diff --git a/openedx/core/djangoapps/content_tagging/api.py b/openedx/core/djangoapps/content_tagging/api.py
index 8a06e483ab78..96f6886b622b 100644
--- a/openedx/core/djangoapps/content_tagging/api.py
+++ b/openedx/core/djangoapps/content_tagging/api.py
@@ -441,3 +441,4 @@ def tag_object(
 get_object_tags = oel_tagging.get_object_tags
 add_tag_to_taxonomy = oel_tagging.add_tag_to_taxonomy
 copy_tags_as_read_only = oel_tagging.copy_tags
+make_copied_tags_editable = oel_tagging.unmark_copied_tags
diff --git a/requirements/constraints.txt b/requirements/constraints.txt
index 3d9f7c08e88b..a28688eedf45 100644
--- a/requirements/constraints.txt
+++ b/requirements/constraints.txt
@@ -131,7 +131,7 @@ optimizely-sdk<5.0
 # Date: 2023-09-18
 # pinning this version to avoid updates while the library is being developed
 # Issue for unpinning: https://github.com/openedx/edx-platform/issues/35269
-openedx-learning==0.18.2
+openedx-learning==0.18.3
 
 # Date: 2023-11-29
 # Open AI version 1.0.0 dropped support for openai.ChatCompletion which is currently in use in enterprise.
diff --git a/requirements/edx/base.txt b/requirements/edx/base.txt
index f76379c69237..ba81c34446d6 100644
--- a/requirements/edx/base.txt
+++ b/requirements/edx/base.txt
@@ -827,7 +827,7 @@ openedx-filters==1.12.0
     #   ora2
 openedx-forum==0.1.6
     # via -r requirements/edx/kernel.in
-openedx-learning==0.18.2
+openedx-learning==0.18.3
     # via
     #   -c requirements/edx/../constraints.txt
     #   -r requirements/edx/kernel.in
diff --git a/requirements/edx/development.txt b/requirements/edx/development.txt
index 2635c6c3c7fa..3f1e197bf5ac 100644
--- a/requirements/edx/development.txt
+++ b/requirements/edx/development.txt
@@ -1381,7 +1381,7 @@ openedx-forum==0.1.6
     # via
     #   -r requirements/edx/doc.txt
     #   -r requirements/edx/testing.txt
-openedx-learning==0.18.2
+openedx-learning==0.18.3
     # via
     #   -c requirements/edx/../constraints.txt
     #   -r requirements/edx/doc.txt
diff --git a/requirements/edx/doc.txt b/requirements/edx/doc.txt
index cd68ea1c26bf..00d75a6029d7 100644
--- a/requirements/edx/doc.txt
+++ b/requirements/edx/doc.txt
@@ -1000,7 +1000,7 @@ openedx-filters==1.12.0
     #   ora2
 openedx-forum==0.1.6
     # via -r requirements/edx/base.txt
-openedx-learning==0.18.2
+openedx-learning==0.18.3
     # via
     #   -c requirements/edx/../constraints.txt
     #   -r requirements/edx/base.txt
diff --git a/requirements/edx/testing.txt b/requirements/edx/testing.txt
index 21adf5f8bde0..7610aa060284 100644
--- a/requirements/edx/testing.txt
+++ b/requirements/edx/testing.txt
@@ -1048,7 +1048,7 @@ openedx-filters==1.12.0
     #   ora2
 openedx-forum==0.1.6
     # via -r requirements/edx/base.txt
-openedx-learning==0.18.2
+openedx-learning==0.18.3
     # via
     #   -c requirements/edx/../constraints.txt
     #   -r requirements/edx/base.txt