The dimension inheritance feature is available for three different types of dimensions defaulting on the project transactions. They are:

At transaction level: where posting types are transactions such as hours, expenses etc.
At setup level: where posting type values are master data such as projects, project contracts, etc.
Custom dimensions defaulting onto inter-company transactions.

This feature has been developed to override dimensions at various points in D365 Operations and Finance. This modification allows the flexibility to interactively redefine how to override dimensions during the posting process as needed. The user can define the Project journals and transactions. The origin of dimensions should be either worker or project or a fixed dimension value, thus allowing maximum control of the data.

This feature is not dependent on parameter. However, the setup is key for this feature to work.