In my viewed events on the IPS module my localities are incorrect. It always lists internal addresses as OUT rather than IN. I've looking through the configuration and docs but only found the AD internal/external zone settings - which are correct anyway.
Where or how does the IPS learn what is inside and what is outside? Would it exhibit this behaviour if I've only got the security policy for traffic sent to the IPS module enabled for just the outside interface?
In the network IPS sensor, you define the networks using event variables. Everything not defined is OUT. I would guess based on the behavior you're seeing that the module is the same.