Processing with delivery orders:third-party bus. trans. not permitted

What causes this issue?

You have entered an <DS:GLOS.item_category>item category</> to which
<DS:GLOS.schedule_line_category>schedule line categories</> have been
assigned in Customizing. This item category will be used to initiate
<DS:GLOS.third-party_order_processing>third-party order processing</>.
However, third-party business transactions are not permitted for
scheduling agreements with delivery orders, or for delivery orders
alone.

System Response

The system rejects the entry.

How to fix this error?

Enter another item category, or change the schedule category assignment
for the item category in Customizing.

Error message extract from SAP system. Copyright SAP SE.