@dorian: I guess cancelling the Manufacture entry won’t work, huh? A bit of customization and I guess you can take the BOM and create a Manufacturing Entry (but without linking the BOM to the entry) that consumes Item Y and produces Items X.
Or you can Material Issue Item Y and Material Receipt Items X.
I know it’s imperfect and not very elegant. But hey, I think it works.
You’re obviously in an industry where Items X can be restocked/reused.