Qualtrics will autonumber the questions consecutively regardless of branching (we usually turn numbering off before we publish/activate the survey, as branching and logic will make numbers "jump" while hiding the numbers makes this seamless to the respondent).
There is no capability (currently) to have the question numbers update automatically to reflect the participant's experience.
Under Tools>Auto-number questions, you can select the questions to be updated in order (we usually change the "Q" to an R or "reference number" as that keeps our internal clients from arguing when something is not really a "Question" (text/graphic type, etc). Or you can use block numbering, which we find useful when there are a lot of blocks in the survey.

Again, we turn off the Question numbering in the survey options, so the question numbering is more for our internal purposes, NOT something the respondent would see. (You can also manually label the items if you want, so long as the numbering system uses 20 characters or less.)