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Transfer learning has emerged as a pivotal strategy in materials science, enabling the reuse of knowledge from data-rich domains to inform predictions in data-scarce contexts, thereby accelerating discovery across alloy design, nanomaterials, and functional compounds. Despite its growing adoption, the effectiveness of transfer learning remains contingent on subtle boundary conditions that delineate productive knowledge integration from ineffective or counterproductive transfer. This conceptual paper develops a theoretical framework to interpret these boundaries by examining interaction dynamics between source and target domains in materials contexts. It explores how mismatches in representational hierarchies—such as between atomic-scale and macroscopic descriptions—disrupt knowledge flow and yield distorted predictive outcomes. Systems-level analysis reveals trade-offs in model adaptability, where reliance on pre-trained representations may obscure emergent properties specific to target materials. Ethical considerations further highlight the risks of bias propagation from simulated to experimental domains, with implications for research prioritization and resource allocation. By integrating perspectives from materials informatics and complexity theory, the framework articulates steering logics to mitigate transfer failures through adaptive feature alignment. This work advances conceptual understanding of transfer learning limitations and provides interpretive guidance for future AI integration in materials science, without empirical validation.