1. Yes, this will cause the LOB to suddenly fill with water.
2. Ineffective area by itself won’t keep the LOB from filling up before the banks have been overtopped. You could do both a levee and ineffective flow.
3. If you don’t need to model the amount of water storage that is in the LOB, this is a simple solution. Hydrographs attenuate as they move downstream. The more area that the water has to fill up the more it attenuates. So if the LOB fills up after the bank is overtopped, it would be more accurate to keep it in the cross section. In the big picture, whether you do so or not may not matter. Depends on the model.