Batch Backorder Release assigns Hold Location

When we run the batch Backorder Release (R42118), it will will assign and commit inventory to a location that is on hold. Then when the shipment approval batch process runs, it locks the order under the user name of the batch process.

We do not use Advance Warehousing so we have a process in our DSI interface that has special handling to put locations on hold. If the location has Allow Pick (APIK) set to 'N', it will set the lot status flag (LOTS) to 'I' for inspection. We don't want those locations to be available for picking.

Is there a setting where we can stop the backorder release from assigning lines to hold locations?