KLM Flying Dutchman - Does KLM issue upgrade inventory by itinerary or segment?

ExpertFlyer shows upgrade inventory on a ATL-AMS-TLV itinerary as O 5 O 5. But if one checks the segments individually ATL-AMS shows O 5, but AMS-TLV shows O 0.

Does KLM issued upgrade inventory by itinerary or is this a glitch in ExpertFlyer?

Yes, award inventory is often based on the entire trip, not only on individual segments, in a fashion similar to fare bucket availability for revenue flights. So this is probably not a glitch.
In your case this means that they want to make some AMS-TLV seats available for the US market, namely for customers flying from ATL.

Yes, award inventory is often based on the entire trip.

Good to have more information on this, as previously all feedback I had was 'married segments logic does not apply to award classes'.

Good to have more information on this, as previously all feedback I had was 'married segments logic does not apply to award classes'.

This isn't exactly gospel, but one day I was unable to score an upgrade on one segment of an MSY-TLV itinerary and the next day I upgraded ATL-AMS-TLV-AMS-ATL with no problem.