Still haven't been able to connect to incentivized testnet

No worriers. This is just a display error, the rewards come in normally. If you need to redelegate that would be possible if you delete and restore the wallet. Please be aware of what that means in terms of having a backup.

Trying to transfer it “back” will not work, because there is nothing to transfer so this transaction will not be accepted anyway.

This was already discussed a few times, for example here: ITN problem! ADA automatically moved to balance wallet

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