Usual wisdom till R11i is that install base gets updated or created as customer product when we ship the product. This shipping must go through the inventory transaction (remember that we can ship no inventory items as well) in order for the IB to be updated or created. But to achieve the same for the order lines that do not go through shipping and inventory (like Bill Only lines with fulfillment), we used to extend Order line workflow (supported way) to plug in a function that sends a message to update or create instance. This used to be upon fulfillment.

Stating R12 this is a seeded functionality. The same function that is given to customize the workflow is added to the order line fulfillment code. Meaning all bill only lines (for that matter any line workflow that has fulfill node and item is IB trackable) automatically create or update the install base upon fulfillment. But again this is controlled by a profile option (OM: Automatically Interface Lines to IB on Fulfillment). You can control this behavior by setting this profile option value as Yes or No.