Posting this here for future reference, as Adobe Support gave wrong answer.
Problem: Converting FM 7 book to FM 11 (by opening in FM 11), all documents show as having invalid X-Refs on opening, but search from Invalid XRefs only shows valid XRefs.
(This is a problem because it makes it really difficult to locate "valid invalid" xrefs)
Tried the usual workarounds (save as FM11, restart FM 11, reopen saved; convert to MIF in FM 7, convert to back FM in FM11; etc.). No joy.
Adobe Solution: Called Adobe Support: after a lot of going around in circles, told me I would need to install FM 8 and FM 10, and do a step by step conversion (FM7>FM8, FM8>FM10, FM10 > FM11) to fix. This seemed silly (they couldn't say why that would work) and impractical (I only have FM7 and FM11, they couldn't provide trial copies of FM 8 or FM 10).
Actually caused by missing fonts in FM11 (installed on different PC). Once I changed got rid of those, the invalid "Invalid X-Ref" messages all went away.