I found the problem by doing a diff between different .launch files. I had a few that did have the restart button active and some that didn't. I tried a few options before narrowing in that the DEBUGGER_START_MODE tag was the culprit in the non-working launch and removing it
1.) I'm currently using 11.4 and 11.3.1, but have seen it in versions prior to these.
2.) K22, KL17, K40, K60, and K12 MCUs using custom boards.
3.) SDK based project.
4.) Yes. To provide additional details I just created a K64 project using SDK 2.8.2 for the FRDM K64 board. I did not add any additional drivers or code. The SDA connection on my FRDM board is setup to use the PEMicro OpenSDA firmware. I have attached the .launch file generated, debugging with this file does have the "restart" button greyed out. By taking the same file and removing the line in question, that button comes back after restarting the IDE.
5.) SDK version does not matter for the MCUs listed, but see #4.
6.) PEMicro
7.) I have seen this with OpenSDA and the PEMicro multilinks. I do not recall seeing it with Segger OpenSDA or J-Link, but those are not the most used solutions for us.
8.) No, the drivers from the IDE are what is being used.
9.) I usually create my launch configurations by going to the debug configurations screen and double clicking on the interface I intend to use. This generates a basic configuration that I can edit. By default these are set to be saved as a "local" file which lives in the workspace dir for the IDE; this can be changed to a "shared" file and is easier to find. This method of generation obviously does things different than the blue button method.
10.) No, the file generated that way does not have the broken line.
11.) The file is attached.
It seems that the debug configuration manager needs to use the same method of generating the .launch file as the blue button from the quickstart panel. That configuration manager is the way files are accessed or modified after they are created anyway.