Once attendance is initialized, does this issue go away?
Yes it will as the Student will now have a current enrollment for the Active record.
We are experiencing this exact issue and we initialized attendance last Friday and started school yesterday. We have an open ticket already and have not gotten resolution.
Update: A Fix for this issue was shipped on 8/19/2020
When students without ENR in their current school have an inactive record in another school, the inactive record may be treated as the most current enrollment and the student account may be disabled if both schools are included in the Nightly Google Sync OR Populate ESI Nightly and the option to "Suspend Accounts for Inactive Students" is enabled on the Google Apps Integration page. This only affects schools that have not Initialized Attendance.