Setting a single axis of an ISM negative results in navmesh not being generated on top of it. However, setting 2 axes to negative scale does have the navmesh generate as is expected.
Also see more information in this second thread:
Expected Result: Navmesh is generated on top of the ISM
Actual Result: Navmesh is not generated on top of the ISM
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-161139 in the post.