Per Gabe Stetson:
We don’t create on the fly records (anymore). We stopped doing on the fly about a year ago.
We link items to existing records (just like the linking project), and any item that doesn’t have a record gets brought back to IRM for rush cataloging.
Anything before that, we would have created on the fly records, checked the item out to a patron, then when they were returned, they would have been brought back to IRM for linking/cataloging.
IRM would then delete the on the fly record.