The following blog suggests that Activity Type used on the time sheet API can be independently supplied. In other words, it does not have to be planned as a demand item on the work package.
https://blogs.sap.com/2022/10/05/timesheet-accounting-and-billing-on-s-4hana-cloud-for-professional-services/
We have tested this and indeed can post time entry using independently supplied Activity Type.
At the same time, same is not possible when using time sheet app. The user is not allowed to create task and independently supply activity type with an unplanned work package. Is this a disconnect between and API and the replated user App (My Time Sheet)?”