However, when you selected items for a character sheet, the system didn't warn you, but while you'd see the items as you selected them, if you selected an unapproved version of an item, the sheet would still print with the approved version, if one existed (that the function we want to see, btw)

So... you're selecting items for a character, how do we want to show that effect, that the approved version of an item card is the one to be used, unless only an unapproved version exists. (This function is to allow "rough and dirty" character sheets, it's assumed we'll need all items on a sheet to be approved before the sheet itself is approved)

As MVP it should warn, especially if it's versioned. Ideally, I think the end game would be to show a list of unapproved objects linked to the sheet so that during the approval process one can make sure that they're approved.

Because for some characters, they can't be played without the right version of the items (Any of the multiform riders, or other characters with similar transformation type things)

I'm honestly not talking about the character sheet display/printing, that can be taken care of down the road. I'm talking about selecting the items from a list to add them to a character sheet.

Say there's an approved version of "Baseball Bat" and an Unapproved version of "Baseball Bat" which exist and the user clicks the Unapproved version of the item. What action should the system take?

1. Allow them to click it but don't give any warning, and when the character sheet is displayed it uses the approved version of Baseball Bat
2. Warn they're clicking an unapproved version of the item sheet, but keep going anyways.

When you say there are approved and unapproved versions, do you mean:
1) There are two entirely separate items both called "Baseball Bat" only one of which has been approved;
2) There is one item called "Baseball Bat" that was approved, but then changed, and the change hasn't been approved?

Option 2.

I think that when you're picking standard items to be linked to a sheet, it should be set by default to only display as an option approved items, unless the person specifically asks to see unapproved items (i.e. I just made a "Tea Kettle" item, it isn't approved yet, but I want to add it)

So if they ask to see unapproved items they know they're getting the unapproved version. For something that has both, maybe a popup, "You're selecting the unapproved modification of "Baseball Bat", do you want to use the current approved version instead?"

there's no need to the pop up as character sheets will ALWAYS use the approved version of an item card if it exists. But what I'm hearing is "Just trust the user to kinda know what they're doing" which I can work with.

It should probably still be documented somewhere, just in case. We work in IT, we know that what we expect and what users expect are two separate things.