Hi Jesse,
Are you replicating the service PR to SRM via ESOA?
If so, then I have to say that this is how standard system works.
Let me explain firstly as below.
1. If you replicate PR with RFC transfer (report BBP_EXTREQ_TRANSFER):
When user creates PR with service and transfers using RFC, we create SC with outline type as HIER. Since we do not support nested hierarchy in RFC transfer, we use one outline (HIER) and one or more service lines under it. While creating SC, we consider each service line and check if it is EP or classic. But we ignore the Outline as it is only dummy from SRM point of view. So in all follow-on cases, i.e. SOCO, finding SOS, or creating follow-on documents, we ignore outline and consider only the functional items. Even in SOCO, since we look for functional items, we get SUBTYPE as EP and logical system as SRM. In this case, we could have extended classic PO.
2. If you replicate service PR with ESOA:
Not handling service hierarchy was SRM limitation when we consider integrated scenario, while ERP was handling it with no issues. So in SRM 7.0, we introduced SOA for tranfering PR from ERP. While doing this design, we also considered having nested hierarchy from PR in SC. So we introduced HIER_SE template and grouping level M.
Owing to the complexity and bring in the behavior like ERP, we also introduced handling follow-on activities at top outline level (like SOS, SOCO, creating follow-on document). So since outline is coming from ERP and we don't set secnario (classic or extended classic), from SOCO it allows only to create classic PO. Since SRM PO doesn't support hierarchy and since grouping level M can have nested hierarchy, SRM is designed to have only classic PO for this scenario. If we use HIER_SRM in case of ESOA, we can still do the extended classic PO, but we might loose out the hierarchy structure from ERP.
Considering the reasons above, if you want extended classic PO, I'm afraid you have to consider to handle this in DOC change BADI (setting BE_LOG_SYSTEM and SUBTYPE at outline level).
I hope this could provide you with some understanding of the design.
Regards,
Wendy