Thanks for the response, Shane.
Lots of tests, but in the end I transcoded to Apple ProRes 422 MXF within the 4K project which resulted in a format of 4096X2160/29.97. And then opened that bin in the 1080p project and cut it into a sequence with 1080p and got the error. Kind of expected that.
Then I tried bringing the sequence into the 1080p project and transcoding to DNxHD 145 MXF. It created 1080p clips but still gives me the error.
Wasn’t sure what to do with the Raster Dimensions setting…I had it at “Project Dimensions (proxy off) on both of these.