Creating an Inspection Lot using a 262 Movement Type

Scenario: We goods issue stock onto Plant Maintenance Orders using a 261 Movement Type. For whatever reason in the business this material is no longer needed and they perform a 262 movement using MIGO to reverse/cancel the original 261. They would like to create an inspection lot and inspect the goods before they go back into stock.

Problem: When I perform a MIGO either using

A03 (Cancellation) and R02 (Material Document)

or

A07 (Goods Issue), R08 (Order) and a movement type 262.

I cannot get an inspection lot to be created. I can post the documents without trouble and can see a long list of 262 movement types in MB51 of all of my failed attempts.

Steps taken so far:

1. I have double checked that the inspection lot origin for movement type 262 is 05
2. I have checked the config in QCC0 -> Quality Inspection -> Inspection Lot Creation -> Maintain Inspection Lot Origins and Assign Inspection Types to ensure the inspection type 05 is listed as variant 01 under inspection lot origin 05
3. I have gone into OMJJ against movement type 262 and ensured that QM IS ACTIVE. I originally tried unticking what I believed was the necessary movements however this didn't work so I have now unticked ALL of them just to be safe.
4. I have gone into the material master and added inspection type 05 to any of my test materials and ensured it is active. I have tried a combination of active and preferred - this didn't seem to fix my problem

I have searched these forums for an answer but cannot find anything. I thought it was now appropriate to ask the question. I am at a dead end as to what to try next. If anyone could offer any guidance it would be greatly appreciated. Incase it is required we are using SAP S/4 HANA 1909. Transactions like MBST are no longer available and it all needs to be done through MIGO as per SAP note 2210569