Phantom comp. &2 in &1 is in make-to-order segm., phantom assembly is not

What causes this issue?

You have used a product as a phantom component for which you have made
the setting <LS>Possible Individual Customer Requirement</> in the
product master. However, the superordinate phantom assembly is set to
<LS>Always Collective Requirement</>.

System Response

This combination is not permitted.

How to fix this error?

Make the setting <LS>Always Collective Requirement</> for the component
in the product master.

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.