Overview:
A Record Type set restricted picklist does not work on Inventory Monitoring Lines when the Inventory Monitoring record is created.
Root Cause:
The Record Type of the Inventory Monitoring Line on the Inventory Monitoring page is defined by the Inventory Monitoring object Record Type.
If there are no active Record Types for the Inventory Monitoring object, the Inventory Monitoring Line uses the Master Record Type which does not have any restriction.
Solution:
Reactive or create a new matching Record Type for Inventory Monitoring object.
Related Documentation:
CRM Help Documentation: Inventory Monitoring