The solution is to follow post-install step taken from CA Service Desk Manager (SDM) 12.6 CP3, problem USRD 1817, which adds a critical entry into table usp_pdmMacroParam that controls the masking of inactive entries in the contact field functionality.
For releases post SDM 12.6, this issue may occur if the given install was migrated from 12.6 to the given release without previously running the above post-install step while the install was at SDM 12.6.
The associated steps are:
39. (OPTIONAL STEP) For Problem: AUTOSUGGEST LIST INCLUDES INACTIVE
( Prob# USRD 1817 )
a. Open a Command Prompt.
b. Change to the $NX_ROOT\patches\cum2 directory.
c. Run the command below to back up the original usp_pdmMacroParam table:
pdm_extract usp_pdmMacroParam > USRD_1817_backup.dat
d. Check if the backup data file above is successfully created.
e. Update the table by running the following command:
pdm_load –u -f data_USRD_1817.dat
f. Log-out and Log-in again.
Attached to this tech doc is file "data_USRD_1817.dat", see file attachment "TEC1751069.zip". It may be used in any release of SDM 12.6 or if it was upgraded to newer from SDM 12.6.