I have added ammo.rifle.explosive to the items.json file under the Ammo and HeavyAmmo sections. Explosive Ammo is still showing up in Phase 1 for me in crates. 

What am I doing wrong?

Hi sams. Sorry, I don't have access to a development server to reproduce/test issues that are reported so I can't be of much help. One thing I can tell you is that the explosive rifle ammo does not belong in the HeavyAmmo category. You might want to try removing it from that category. Otherwise, I would just double check spelling and everything in your JSON file, it's very easy to make a mistake.