Hi EllenK,
Yes, system will not allow to update the item model group for a stocked item if transactions are already recorded with that item.
If you want to do that, then better go to "Default order settings" of that item and enable the "Stopped" check box to stop all type of purchase, sales and inventory related transactions with that item first. And then release a new item from the product.
Did you find any challenge in this process?
Regards,
Sourav
