To sort by Original Order Entered, you have to first set the "Sort Transaction Item By" to "Original Order Entered".
Then make a New Order and print an Order report.
In Original Order:
LAMP BAMBOO SHADE = Living room
MIR-BEV FRAMELESS = Living room
PILLOWCASE-4-K = Bedroom
OUTDR PATIO TIFFANY = Living room
BED-MATTRESS = Bedroom
You would notice that items in the Order report are properly sorted by Original Order Entered. (Same case when you process the Order to Invoice and print the Invoice report)