How item substitution works in OM?

Summary:

We have done setup for item substitution but not working properly

Content (required):

Relationship with preference is given in PIM for items and also based on sales order type, manual scheduling is perefered.

After checking "Check availability" in fulfilment lines, it does not show item to be substituted based on on-hand available for item.

Version (include the version you are using, if applicable):

23B

Code Snippet (add any code snippets that support your topic, if applicable):