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Unfortunately we have had to make the decision to not bring the new Inheritance model to TFS on-prem with the next major release. It was a tough decision that we didn’t take lightly. The scope cuts that we had to make in order to deliver it to on-prem were just too painful, and would not give the User Experience we would be proud of.
We are still planning to bring it to our on-prem customers in a future release of TFS.
Sorry for not having a better answer.
VSTS/TFS Program Manager