I am using a heavily edited database whereby I have applied a transfer embargo to pretty much every team in the world down to a certain reputation (several 000 teams) into the 30's and 40's game timeline wise. What I have noticed is that some teams embargo's have seemingly disappeared in-game and upon investigation all of them have been through a takeover process (successful and failed) which, I assume, has re-enabled transfers just as it does when you come out of the temporary embargo during that process (Sheffield Wednesday and Leeds Utd have both come out of embargo in the save file)
Although not part of the bug/issue I have noted that the AI around clubs and players doesn't really seem to change in terms of players still wanting moves (get that but they'd be aware that clubs cannot sign players), clubs don't seem very proactive with free agents with some goo players spending 12 months in the wilderness, clubs don't seem to invest their transfer budget into wages or off the field improvements and for the type of embargo I put in place (attached player ban) clubs aren't able to approach to sign despite the fact that the transfer will be a FREE transfer when it concludes
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