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Internal Transfer for Planned Item

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We are configuring Internal Transfers for Planned Item.

We understand for planned item the flow would happen via GOP (ATP plus sourcing rule and not inter org parameters)

I have 2 items and both are same configuration

We are creating Internal transfer for Org= 1507 Which has below sourcing rule created

When entering Internal Requisition for Item_05 we see rank 1 org(241) which does not have on hand is shown which is not correct.

If any other source org in hierarchy does not have on hand it does not show, but if rank 1 does not have it would still show up.

Please see below : rank 1 is showing even if on hand is zero

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