Hi TriggerBill, thanks for the report - and no, it's not actually incompatible, it was a bug on my side.
When you upgraded an inserter, the mod tried to return the old inserter item to your inventory, but it used the entity's name as the item name. That works in vanilla, but Bob's entities have different names than their items - for example the bob-red-inserter entity is actually placed by the long-handed-inserter item - so the game couldn't find an item called bob-red-inserter and crashed.
Fixed in version 1.1.2: the mod now looks up the correct item from the game's prototype data instead of assuming the names match, so it works fine with Bob's (and other overhaul mods) now. Please update and let me know if anything's still off. Thanks for your patience!