When working on larger projects that require baritone to walk to new areas of a build to place certain blocks (lets say red wool), it can sometimes pass thru sections where red wool isn't needed and will pause, asking for blocks not in your inventory, despite other areas of the build requiring red wool. It would be helpful if there were a togglable setting to only allow Baritone to build with blocks in your inventory, and ignore blocks in the build that are not in your inventory. When turned on, Baritone would now only pause if a) it can't reach where it needs to go or b) if your inventory contains no blocks related to completing the build. Thanks!

You can exclude blocks from being built at all (#buildSkipBlocks, #buildSubstitutes, #buildValidSubstitutest should all be able to do this with different nuances in behavior).

The problem here is that Baritone doesn't even know there is blocks it could build. The current behavior (and it will stay like that for at least a couple more months) is to scan until some amount of wrong blocks is found, and if none of those can be corrected it fails.

I'll close this issue, since fixing that behavior belongs to the general "make the builder not be crap" goal.

What if for this custom setting, Baritone checked all blocks in your inventory when #build or #litematic build is executed, then creates a list of all blocks NOT in your inventory for the #buildSkipBlocks list, which clears upon the next pause or #stop

Good idea, but sadly that's actually harder to implement. Mapping between items and the blockstates they can place is hard, and the best solution I know is basically hardcoding the entire thing.
What would be easily possible is treating anything it thinks it can't place as correct. That would probably work in many cases, but "anything it thinks it can't place" also comes with a bunch of gotchas. Maybe I'll try it anyway.