Hi,
It seems to be a logical issue you have:
- you need the shipping address to be filled so that the shipping methods can be filtered based on it
- you need the shipping method to be selected to be able to allow or not the entering of the shipping address (no shipping address, when pickup at store)
I would recommend to ask the customer to enter his shipping address on the first step, along with the billing address, and then on the second step to select the shipping method.
And then, you could potentially add some custom text with a "text" view in your checkout workflow to tell the user that pickup at the store can be selected in the next step even though he has to enter a shipping address.