I tried the “unknow” option in ArcGIS Pro 3.4.2 and it appears to work fine.
In the screenshot below:
The coordinate system of the map is “Palestine 1923 Palestine Grid.”
The coordinate system of one of the layers is “Palestine 1923 Palestine Grid,” and the other is “Israel TM Grid.”
Now, in the case where these two layers are added to a map with the “Palestine 1923 Palestine Grid” coordinate system, they are aligned according to the coordinate system of the map, which in this case is “Palestine 1923 Palestine Grid.”
If the coordinate system of the map is set to “Unknown,” then the two layers will be displayed using their absolute units





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Jamal Numan
Geomolg Geoportal for Spatial Information
Ramallah, West Bank, Palestine