Question

How to remove a library from the PO Line Owner drop-down list when creating a PO Line?

Answer

The "PO Line Owner" (Purchase Order Line Owner) dropdown is managed by the Purchasing Operator's Scope, or, Purchasing Manager's Scope. 

The Purchase Operator or Manager will see only the libraries that are in the scope of their Role when placing a new order.  If you want a certain Library (or a number of them) to be the only one(s) displayed in the list, you should assign permissions to order only at the library's level, not at the institution level.   If currently the Role has Scope of the Institution, remove that Scope and add the needed Library level.

Note that the list of Libraries is taken from: Configuration Menu > General > Libraries > Add a Library or Edit Library Information.