Right now, if a hold is tied to a specific item (for any number of reasons), and it needs to be set back to a title level hold, you have to delete and readd the hold. This is cumbersome enough, but it's even more cumbersome when a record has multiple holds (especially 20+), and the hold has to be replaced and manually back in its original priority order. It would be nice if Koha could allow you to reset a hold back to record level after it's been placed, for all cases, including when it's in transit for a patron. Situations arise where an item arrives damaged or is lost in transit and a new item is needed to fulfill the hold. There should probably be a permission to control access to this proposed functionality, like the existing modify_holds_priority permission.
I agree, this is a major problem if a hold goes missing after it is allocated. There doesn't seem to be a simple way to 'de-allocate' a hold and return it to it's original state (i.e. a bib-level hold at the front of the queue).
I believe this is a duplicate of bug https://bugs.koha-community.org/bugzilla3/show_bug.cgi?id=9834 *** This bug has been marked as a duplicate of bug 9834 ***