The system shows inventory value as negative in on hand report even if product inventory is 0. As per support team, they suggested not to select the dimension "Location" to hide these rows. It means, location wise inventory value can go negative.

If system has provision to select the location as dimension, then report should be shown properly like in other cases.

My view it, if this is a bug then system should be fixed. If this is a feature to use location dimension, then system should be made compatible for location dimension.

For more detail, you can refer the LCS ticket - 2408280060004023 and incident - 558012220 on the Microsoft support portal where they raise the ticket to product team.