Ignore Allocated Qty

I'm looking for clarification of Ignore Allocated Qty flag on replenishment rules.
• I cannot find any reference to this flag in the online documentation. Unless I missed it, I suggest it be added.

• This is scenario I tested for an item:
Current location qty = 492
Allocated qty = 20
Min: 480
Max: 700
Case qty = 160

So if allocated qty is factored in: 492 - 20 = 472 therefore location is below min and one case of 160 is needed to replenish to 632/652.
If the Ignore Allocated Qty is not checked when I run replen nothing is allocated (since 492 > min)
If I turn the checkbox on for Ignore Allocated Qty, then one case is allocated for replen. The checkbox seems to work opposite of what I would expect.