Kind of. Compliance notices and may prevent you from dealing while they do due diligence, which involves asking if you're an insider and presumably some other stuff they don't tell you about. Penalty box can last several days and only applies to buying/selling the particular issue, not the account as a whole and you can transfer the position out. This happened to me when buying an OTCQX Premium stock and I imagine they'd be more concerned on the sell side. My trades were large in absolute value and as a percentage of volume but small as a percentage of ownership. I've seen similar stories on Twitter from microcap fund managers.
The account was never frozen, just the instrument. I don't remember the exact timing as it didn't affect my trading but remember being bemused because I could still trade the instrument in other accounts I control at IBKR.
I don’t know what the % of average volume cutoff is, but this has been a problem for me in lower liquidity listed stocks as well as OTC.