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In case of overridden collection, only root collection can be instanced from outliner. Whereas, "Add collection instance" operation from viewport works with child collections as well. To make outliner operation consistent, set `is_liboverride_allowed` to true. This will let instancing of child collection that are overridden. Co-authored-by: Bastien Montagne <mont29@noreply.localhost> Pull Request: https://projects.blender.org/blender/blender/pulls/126881