Bracket Order(BO) and Cover Order(CO) are special product types. They cannot be converted to any other product type. Margin Intraday Squareoff(MIS) products, on the other hand, can be converted to Normal(NRML).
NRML Positions are mark-to-marketed(MTM) on a daily basis. Buyer and seller accounts are debited by the Clearing Corporation on a daily basis. Profits/losses are settled on Trade day plus 1 day(T+1) but the profits from closed positions can be utilized for further positions on the same day.
If you have a margin shortfall to hold the NRML position which requires the NRML margin, then the trading software will not allow the conversion to take place. This will create a shortfall during the daily MTM performed by the Clearing Corp. Hence, only on availability of the entire NRML margin will position conversion be allowed.
Hope this helps, cheers!