As far as I can tell, the ALRS items can only be created in the Geodatabase outside the feature dataset, then moved into the feature dataset, and that only works when the feature Dataset M tolerance matches the network tolerance. Creating a feature dataset with a different M tolerance than the network, and it will likely be different by default, then moving the network and affecting the ALRS Network M tolerance seems like not a good idea.
The Feature Dataset M tolerance needs to match the network M tolerance so it would be a nice feature to be able to create the ALRS in the feature dataset. Also perhaps in the process of creating a new feature dataset in the presence of a route network, the route network M tolerance would be the default for the feature dataset.
