Unable to perform transfer order return without physical shipment

Summary:

We are trying to perform transfer order return without physical shipment and keep getting error message and unable to return.

Item set up as returnable, stockable, lot controlled item. Interorg parameter is set up correctly. If I don't uncheck the without physical shipment, I can submit the Transfer Order return (but this doesn't meet our requirement as we don't want to pick and ship again).

Anyone experienced same issue and have thoughts on how to fix it?

Content (please ensure you mask any confidential information):

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

25c

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