To reproduce:
1. Open the user's attached project
2. Open scene "Test"
3. Make sure the Cache Server Mode is set to "Local" in Preferences -> Cache Server
4. Change the Layer of the "Cube" instance in the scene to any other than Default, apply changes to prefab
5. In the Explorer, copy "Assets/cache/Cube.prefab" to "Assets/", overwrite the original Cube.prefab
6. Switch back to Unity and observe that the Cube instance in the scene has not changed its layer, even though the prefab has

Expected result: Prefab instance in the scene has the same properties as the prefab
Actual result: Prefab instance in the scene is not refreshed after prefab is changed

Reproduced with: 5.6.5p1, 2017.1.3p1, 2017.2.1p3, 2017.3.1f1, 2018.1.0b6

Note:
- It may require enabling Custom Cache Location in Preferences -> Cache Server, if the issue does not reproduce after the first few tries