@Clara Cleverence 

"The issue is that QuickBooks isn't really built to handle inventory adjustments to COGS directly, which can be kind of a pain since it sees cogs as an operational expense, not an item-level cost adjustment."

The pop-up is just a reminder.  All you need to do is click 'OK' and QB will make the adjustment to COGS at the ITEM LEVEL.  Have you used QB Desktop?  

"Maybe stick it under "other expenses""

Scrap as an 'Other Expense'?  Yikes.  Scrap is an operational expense and making an inventory adjustment to COGS is the proper way to record that.  If scrap needs to be tracked separately, creating a separate 'COGS - Scrap' account is proper accounting.