Hi @jbarr,
I applaud you for experimenting with combining sections from different semesters into the same year-long course shell. That should help instructors manage their course list.
It is not possible to mark a section as "inactive" so that it does not appear in the "Assign Access" / "Assign To" list.
I would encourage you to head over to Canvas Ideas to submit it as an idea. You can refer to https://community.canvaslms.com/t5/Instructure-Community-Guide/tkb-p/community#Ideas for more information about the process.
You may also want to review It’s Time for Your Feedback on the Future of Ideas & Themes (2024-10-18) and Thank You for Your Feedback on Ideas and Themes (2024-11-21) for information about how the Ideas / Themes process will be changing in the future.
Going back to the proposed functionality and taking "Assign Access " / "Assign To" out of the picture, what you are trying to do may cause confusion or problems for course design and course management when preparing for the second semester and when the second semester is running.
For myself at my institution, I typically advise against making changes to a course shell after a semester has concluded because a semester course shell is considered an archive or time capsule of what a course looked like and what happened.
When preparing the course shell or while it is running, you/instructors may want to delete or unpublish content but deleting the content (obviously) deletes the content and some content cannot be unpublished because of previous submissions.
If this is something that you end up doing, I would be curious to know how it goes.
-Doug
P.S. I apologize for my additional comments. They are just the thoughts that were going through my head.