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The Cascade functionality will not work with Locator control enabled. This is the intended funtionality
In the case of subinventories with Locator control enabled , if in po distributions if the subinventory with locator control specified is entered then it is mandatory to enter a default locator(associated to same subinventory) (in Item Locator defaults tab)in Item Transaction defaults form for the cascade functionality to work .
In the Receiving Transactions window, the cascade function is available for deliveries if you have specified an Item in the Find Receiving Transactions window. Performing any manual transaction in a line disables the Cascade button, and it is not enabled until you have again selected the Find button in the appropriate Find window.
When you select the Cascade button, Purchasing displays the Cascade Details window in which you must enter the cascade quantity and the unit of measure. When you select the OK button, the cascade process begins