Warning Message :
Order has not been processed, all quantities of an order can not be used to create a back order.
The reason of creating a back order is to create another order for the items that can not be processed at the moment. The order which you want to create as back order has not started any process yet, so it not possible to create a back order for the whole order
Try allocating the order first, if the order status is changed to Started you can create a back order.
If the status is Entered, Check Inventory or Approved, You can keep working on this order. No need to create a back order.