"There is a client who was newly created last month and it is indicated that they have returned from inactive, not sure why it would show that"

I have again looked into the coding and it appears that "returned from inactive" is literally only looking for clients who have a status of Active that started this month. It doesn't check to see what happened before the "Active" status happened. So clients who are newly identified and also clients who are returning from inactive would both be a "yes" here.