I have checked previously reported similar cases

Here is the RnD explanation given on a such issue.

“ According to the existing functionality, this is how Distribution Order is designed. Distribution orders are used for moving inventory parts between sites.

The supply code is hard coded as 'Invent Order' and it basically expect goods to be ready at the supply side inventory. If the supply code of the intended part is some thing other than 'Invent Order', this should be handled as a separate process.

Eventually required quantity supposed to be in the inventory. This is also stated in the documentation.

Note: the internal customer order lines are created with a supply code set to Inventory Order. The supply code will be set to Inventory Order regardless of how the sourcing option is set on the sales part.

Training Material: Released customer order lines are created on the supply site with a default supply code set to Inventory Order. The supply code will be set to Inventory Order regardless of how the sourcing option is set on the sales part.”

Hope this will help you some way.