Process Manufacturing Regulatory Document Management

Hi

I have recently moved to a support role in a company maintianing item data in  the Regulatory Documents Management module.  11.5.10.2.  

There are two things which are puzzeling me and would appreciate any insights you have.

1.)They have not maintained the link between the Regulatory item and the Inventory item in Master item assocaitions.   What functionality would this prevent?

Also all their manufactured items have been set-up with the Source Formula flag set to Standalone,  and they have entered the data themselves in the Exploded Components form.  

However when I test it the way I expected it to work  i.e. Set a regulatory item up with a formula source of formula,