Playing around with the "Prevent Negative Inventory" preference. Installed bundle and enabled features. At what point does it actually prevent you from saving the transaction as described in the suiteanswer? So far Ive been able to save SOs and WOs when entering a negative inventory item without any issues.

It's been a year since I tested this. I guess when posting transactions such as Item Fulfillment and Work Order Issue/Assembly Build are created?

When it is enabled and you have entered the location and if it goes to negative inventory it wouldn't save the record. In case if it allow to save then you have to check the box prevent negative inventory in general preference.