Assuming you don’t have any other commands/config written prior to the ones in your comment, yes…
By RFC definition, leafref is a “reference” to an item existing at the specified path (/system1/system-name in your case).
You don’t show any such command creating Linux in system1 system-name, so ConfD correctly rejects configuration as invalid - reference does not point to existing item…
but default value shown in your excerpt is "" - empty string, and not “Linux” or “Windows” that you try to set as reference… type leafref means that it can hold values that do exist someplace else - on the path specified…
(leafref it is not a trigger that changes a node that path points to, but reads/validates against it)
xubuntu-dev(config)# system3 system1Name Linux
xubuntu-dev(config)# commit
Aborted: illegal reference 'system3 system1Name'
xubuntu-dev(config)# system1 system-name Linux
xubuntu-dev(config)# commit
Commit complete.