Inventory Interface = 'N', Edit Item Master for Non-Stock

We are having an issue with the XT4311Z2 still fetching on the Item Master for the Purchase Order on a Direct Ship.

We are entering a Direct Ship Sales Order and automatically generating an OD Purchase Order.

Line Type for both is equal to a D

D line type has an Inventory Interface flag = "N" (Non stock, we do not have our supplier's items in our item master)

D line type does NOT have the Edit Item Master for Non stock.

When entering the Sales Order, we are getting the error that the Item Branch Does Not exist (error 0294).