Hi Tammy, sorry for the delayed response.
I wasn't able to find any JIRAs that made this change in validation.
This does appear to be a bug, the ST should use the same validation that EC is using to determine if an account is Federal or Federal Pass Through when the FEDERAL_ONLY_BALANCE_IND is set to Y, not the CG_DENOTING_VALUE which is what it appears to be looking at to determine allowable transfers after Effort Certs have been created.
I'll log a ticket and if anyone else has anything to add, questions, concerns. Let us know.
Thanks, Kymber