Just recruited a guy at D2 who transferred from a D1 school immediately after sitting out his freshman year due to academic ineligibility (I assume he was rescinded). When I recruited him he was listed as having 3 years of eligibility... will I get the 4th year of eligibility with the Sr/5 designation? Or does the transfer somehow kill that?

You get the 5th year as long as the player maintains a 2.7 GPA or doesn't go EE (unlikely for a guy that was cut). The GPA thing was true in the previous version of the game. I assume it still is.