Once you define your first mapping; version enforcement will be activated for that project. Depending on your plugin settings and you may not be allowed to select unmapped component and version pairs. This enforcement will work in issue edit screen, inline edit in issue page and also for any workflow screen, as long as component field exist on the screen.
Which versions are shown on version list depends on the plugin configuration and which components are selected. This is complex in nature and we will try to explain different scenarios starting from the most basic one.
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