Under Frequently Asked Questions in the document entitled "Technical Note TN2259," which is "Adding In-App Purchase to your iOS and Mac Applications," there's this bit
Question: My iOS application is currently signed with a Provisioning Profile
that uses a wildcard App ID. How do I enable my App ID to support
In-App Purchase?
Answer: Read the Creating and Configuring App IDs section of
the iOS Team Administration Guide to learn how you can enable your App
ID to support In-App Purchase.
The link points here, and there's a section called, "Updating Your App to Include APNS, iCloud, In-App Purchase, or Game Center Requires an Explicit App ID"
That said, I don't know (yet) at what point the app takes on the new App ID. Is it when you upload for review, before that, or when it has been approved? I am working on this problem now, so I might be able to add to this answer soon.
Edit: The explicit app id only affects the piece of software you are testing and has, essentially, nothing to do with iTunes Connect whatsoever. This means that if you are testing in-app purchases, the piece of software that's running (your app) has to have a provision profile based on a cert that is app specific. What happens in iTunes Connect is totally irrelevant.