Symptoms

In the Item Ref if you pass the "empty/Blank" value in the form of a Datafield or Inline function (Empty String) the SmartObject returns no results.
 

Diagnoses

The item ref has no option to use a "isNull" filter to pass to the underlying SmartObject. due to this passing a Blank value the Smartobject doesn't return any results for the Reference.
 

Resolution

Identified as a bug in the software. a Bug has been logged and prioritized to be fixed in a future release of K2.

Workaround:
Set column to have a default value like "Empty" / "Null" and then use that in the item Ref created in the Workflow.