I too have this requirement and was stuck in the same place you are. I was able to figure out how to pick from the location when using the negative inventory configuration and how to have the release to warehouse automatically process the work with a pick location.
As mentioned in other posts:
Item Model Group - Enable physical negative inventory
Warehouse - Enable physical negative inventory
Location Profile - Enable allow negative inventory
Location Directive - Enable allow negative inventory
Location Direct Failures - Disable stop work on location directive failure
Once the above is complete, release an order to the warehouse (all other standard order prerequisites must be met)
In the work lines, the pick work will not have a location. If you use the mobile device or the mobile device emulator you can perform the pick and put manually.
In the mobile device or emulator, log in, select Sales Picking, add the Work ID, enter your pick location, enter a license plate, enter your put location if prompted, and then your work will be closed.
Odd thing is once this step is performed once, then any subsequent Release to Warehouse orders will process the work automatically and add the pick location.
