We had an item created with an incorrect asset account. We created an Inventory Adjustment for the said item. We corrected the asset account in the item record. The IA didn't get updated although the period is open. Is that the standard behavior?

Check Setup > Accounting> Accounting Preferences, tab Irem/Transactions

It's ticked and is not editable.

Just check the notification, not sure whether you solved it already or not. But ya, the checkbox is disabled if you have any closed period