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Catalog items set as Preferred with the "Switch To" enabled allow switching to for all catalog items

We have catalog classification set up for Preferred and Non-Preferred catalog items (2023 R2). What I've noticed and not sure if this is as designed based on the documentation of "Allow Switch to?" is enabled on the preferred item, it shows up on the Alternates subtab of all catalog items (General, Software) even though the catalog item itself does not have the preferred item listed as the Alternate.  Any user can go to a request on the My Requests tab and select the item on the Alternate subtab even though there are no alternates listed. 

As a workaround we enable the Allow Switch to on the item we want as the preferred, go to the non-preferred, add the catalog item that is preferred on the Alternates subtab, save, then remove Allow Switch to? on the preferred and it works as it should and only shows the alternate on that item and does not allow anyone to switch to for items that do not have it.

Is this the way it was designed to work?

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This appears to be a bug, as I reproduced it just as you intended. I reported to the engineering team and they are working on it.