When Ship Confirming (P4205) two or more sales order lines in the same transaction set for the same item, lot, and location, the ship confirm was not able to account for the accumulative effect of the shippable quantities when checking the shippable quantities against the on-hand quantity in the F41021 (Item Balance).
Each line checked the shippable quantity against the on-hand quantity in the F41021 (Item Balance) as an independent transaction. This allowed for the on-hand quantity to go negative when the processing option was set to not allow for negative on-hand quantities.
Starting with 9.2, the functionality has been enhanced by Enhancement Bug 18462856 : SHIP CONFIRM ALLOWS NEGATIVE ON HAND WITH PO SET - SINGLE USER.
Now Ship Confirm processes an accumulation of all pending transactions for the user and prevents a user from confirming multiple lines for a specific Item Location beyond what is available on-hand.
The edits added to Shipment Confirmation (P4205) also function in the same manner when running the batch processes Batch Ship Confirm (R42500) and Transportation Confirmation (R49500).
This is also explained in KM document 1339710.1 - E1: 41: Preventing Negative on Hand Inventory under "Example 2 - When two lines are ship confirmed with identical item/branch/location/lot numbers" as well as in E1: 42: Ship Confirm Allows Inventory To Go Negative (Doc ID 2090099.1).