Master Item (Master Catalog) refers to everything related to the menu that is created on the HQ level. Master Items are used to manage the same item catalog for multiple sites from one place. A site can be connected to an HQ without enabling Master Items. In this case, the HQ functions for reporting only and not for catalog management from the top down.
A site must be connected to an HQ and must have Master Items enabled to inherit the Master Catalog
The inherited master catalog is almost untouchable from the connected site level (Pricing, Modifier Group, Decisions, etc.), while a few things can be set specifically per site (Routing, etc.)
Sites that work with Master Items are easily identifiable by the following:
On the My Site screen (Settings > Site Details > Settings HQ)
There is an indication on the Menu tab, as seen below
The Item itself appears in blue
Master Items cannot be edited from the site level