Source organization defaulting rules in internal requisition

Hello... We got a challenge with source org defaulting on internal requisition in B2B process.

We enabled back-to-back order process for certain items with ATO enabled. Created sourcing rule with type = Transfer From and org code at org level.

We also have source type = Inventory and source org in General Planning tab in item definition.

After order line is progressed, internal requisition got created with source organization fetched from general planning tab in item definition instead of org mentioned in sourcing rule.

Shouldn't the precedence go to sourcing rule first before item definition? or is there any additional setup to have sourcing rule highest precedence over source org in item definition?