Why this preference setting isn't working: "use same item reference to implement multi-instantiated parts"

Hello,

I have created a Manufacturing Responsbility Mfg Item for a physical product in XEN webapp,

In 3DE 2023x on premise, I checked use same item reference to implement multi-instantiated parts——Search for scoping Item Everywhere in the preference setting.

Then I use Create/update Item Structure to create the MBOM,
Why create a new Mfg Item instead of using the existing one in the database?What are the possible reasons?

Thanks.