It sometimes happens, usually by mistake, that only the wikitext for a reference name is copied, and the footnote's content is not defined anywhere else on the page.

For a simple example, see https://en.wikipedia.org/wiki/User:Amire80/ref-name-only

When the user clicks on the footnote number of such a reference, Visual Editor says: "This reference is defined in a template or other generated block, and for now can only be edited in source mode"

This is not correct. The reference is not defined in a template or other generated block; it's not defined at all. It would be far more useful if VE said this explicitly.