Another way to interpret this error.

If you are tracking batch numers, then you reservation hierarchy should have the batch as dimension of inventory. the batch number can be below or above the location, according to your business requirements.

If the batch is above the location, then you need to specify the batch on the order line, and not depend on the Warehouse Management allocation logic to select a batch for you.

If the batch is below the location, then you do not need to specify the batch on the order line, but instead depend on the Warehouse Management allocation logic to select a batch for you.

The same reasoning applies when you are configuring items to be (or not be) serial controlled. If you are using other dimensions such as GTD, then the same reasoning also applies.

Here is a helpful matrix that you can use to teach you a little more about the reservation hierarchy in AX | D365 F &O