To answer your questions in the order asked...
The item/location combination already exists because any item may be stored in any location. Often, the item/location combination for the location has been previously used, but the picking sequence was different (and the stock has long ago been sold).
I'm looking to edit the picking sequence whether the item/location has been previously set up or not.
For purposes of this topic, I don't care whether the edit is available if the Stock Transfer is between different items. If someone wants to chime in to express their opinion, that would be good.
The client receives stock through PurchaseOrders. I don't expect to be able to set the picking sequence for the initial receipt. I am only concerned about stock transfers. Stock transfers is the function that records the movement of inventory, and it would be logical to be able to record the picking sequence during the function.
Steve