Matrix Item Error: "Subsidiary restrictions are incompatible with location"

When I set up a new child subsidiary for the first time - I did not realize that inventory items were marked with "include children" as well as having the "preferred location" populated.

Since the "include children" was marked - the Matrix parent and child items were associated with the new subsidiary. However, it seems that "preferred location" is only editable on the parent record. I receive an error every time attempting to edit the parent & update to matrix to (1) uncheck include children, and/or (2) null preferred location. Further to that, I cannot edit either of these fields on the child item via CSV, UI or Mass Update.