If any items are in a machine's output slots, it won't operate at all, even if it could still place the recipe's outputs into the slots. For example, if you place a stack of 64 iron ore into the input of an alloy smelter, it will turn one of them into an iron ingot and place it in the output, and then won't do any more work until you remove the ingot. Tested with Modular Machinery v1.6.