RE: "... order is being added as a shipment" I'm still confused about your replies and wondering if that's the issue.
Shipments are a "child" of an order. One Order can have one or more Shipments, where a Shipment can have one or more order items in it. On the Admin > Order page, are you adding Shipments using the this page? https://admin-demo.nopcommerce.com/Admin/Order/AddShipment/1