When an item with a serial number is shipped as part of a Transfer Order and in Transit, D365 F&O allows for a stock adjustment to be made for the same item & serial number in another warehouse. Then when the Transfer Issue process is carried out there is an error saying that the item is already on hand in another location.

We have an integration where we are seeing adjustments being made for the same item & serial number. And the Transfer Order cannot be received without adjusting the new item & serial number off the new Warehouse.