When a new version is being created for an item by clicking the "Create version of this item" link in the navigational bar and the "previous" item (not the one in submission) is shown, the link should not be visible anymore.
This is checked using the versionHistoryService to see if it's the last version and if it's archived or not.
This check is correct, the problem is that the versioning is not taken into account when creating the validity in the versioning Navigation. This will result in the check not being done again.
This can be fixed by adding the latest version into the validity.
If a new version is created, and the item is viewed again, this is taken into account and the correct checks are done, making it so that the "Create version of this item" link is NOT visible now.