First, don’t need steps for this. Have created more of these than I care to remember.
Will make a concession here. Upon initial creation, Calc file changes can be made and seen in Base. You cannot see added records if it is more than what was originally entered (unless Base is opened & closed). You can see if a record was deleted. If deleted an added record can be seen in its’ place.
All this goes away after both files are closed (possibly after all LO is closed). Then reverts to what I have stated before - no Live updates. This is using LO v7.0.1.2 on Ubuntu 20.04.1 Mate.
Also, earlier, re-checked MailMerge. Specifying the Calc file there will create a Base file (for me in Documents folder). Was never asked where to put it. Automatically done for me and named using the Calc file name. Can be seen in Registered Base list.