When using the Approval Workflows for Vendors, Customers and Items (Vendor Approval Workflow, Customer Approval Workflow and Item Approval Workflow) - typically this is used for newly created records.

The new record can still be used on a range of Purchase and Sales documents, BEFORE it is approved.

For example, you can create a Purchase Order for a vendor that is NOT yet approved and then send/email the Purchase Order to the vendor, before the vendor is approved.

Ideally, there needs to be a complete block (restriction) so that you cannot insert a new customer, vendor or item record until suck time is the required approval is done.