I have items setup as lot-tracked items, and am bringing on a POS system to integrate with NetSuite. Since lots are not captured at checkout using POS, how does this typically work? Would it make sense to create new items?

Then maybe you should not use Lot-Tracked items. Or, if you really need it for Non POS transaction, then you may want to create a script which automatically assign any lot number available to the location when the sales transaction is created