If MC sees an nfo file that is named the same as an avi, it assumes the nfo is correct & ignores the avi altogether. This is so you can manually edit the nfo if you desire & it won't be overriden by MC. This is the same behavior found in XBMC. If the nfo exists that is named the same, the information about that file comes from the nfo, not the file itself.
To resolve an incorrectly created nfo, then yes you need to delete the nfo & then search for new episodes which will recreate it again (hopefully correctly
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Rebuilding TVShows basically clears the current data for that show or shows, searches for nfo's & adds them to the database. New episodes will not be searched for until you search for new episodes. Basically rebuild is to rebuild the internal cache (database) from the nfo files already existing.
Cheers