Thanks for the replies @chriscas and @dbrace . I followed up with Delta Math and they are unable to replicate what is happening to me and think it's a Canvas setting on my individual or institutional end.
Parts of my prior communication to Delta Math:
"Having the continuous automatic grade passback, even after a student has earned a 100% by the due date, is the problem. It updates the grade on the assignment in Canvas, and when it posts the new grade, it is marked as late because that is after the due date. It is not marking down their score, it is flagging it as late. [...] it is because [...] the grade passback continues [from Delta Math], even after the student has earned a 100% on the assignment."
"The major problem is not a student completing an assignment after the due date, it is a student doing optional practice within an assignment's topic after they had already completed it for full credit by the due date. This is not solved by the manual passback strategy. I have students doing optional practice for a unit test on assignments from weeks ago that they had already completed and were assigned full credit for on the due date. Doing manual passback once everyone had completed the assignment would not solve this issue. It would also flag all the assignments as late because the scores are being imported from Delta to Canvas after the due date (which is what Canvas counts as the submission time)."
Responses from Delta Math:
"the piece that we are unable to recreate is the assignment being marked as late. For the screenshot below, the due date was in the morning on 10/29. However, work done later in the day or even this morning that was passed back is not being marked as late on the teacher or student end."
"After taking a look at Canvas' documentation, the best path forward may be for you to manually mark these students from "late" to "none" if they wanted additional practice after the assignment's due date. You could also play around with the due dates within Canvas if needed. The grade calculation will always pull from the due date listed on the DeltaMath portion of the assignment, so the dates do not have to match."
Where this leaves me:
As I have been doing, I am going to have to pay attention to which students have earned full credit on a Delta Math assignment and monitor Canvas to see if anyone is marked late after the fact. Then I will have to go back in and manually change their notation from "Late" to "None." This is tedious and frustrating.
Any thoughts?