Yes, that is essentially what is happening.
These voices are non-virtual in that moment, and will contribute to your max instance / max virtual voice counts, and in large enough quantities could flog your CPU. I would be surprised if that was the main performance bottleneck in your game if you do get to that point though.
Some large projects choose to have global event culling systems for greater control over event spawning, but the majority of large projects don’t require this, because they don’t play all events at once or rely on virtualization to enable/disable sounds as you are doing. Instead, they use collisions to start events when the player is within range of the object making the sound, and stop the event when the player leaves that range.
Perhaps rather than playing all of your insect sounds at once and relying on virtualization to make them audible, you could use a Trigger Actor and start your insect event on Event Actor Begin Overlap, and stop it on Event Actor End Overlap.
Audibility doesn’t get recalculated until a new event instance is created, so if you change the stealing mode the profiler won’t show any change until a new event instance is created. I will get the Dev team to look into this and see if we can trigger an audibility calculation when changing the stealing mode- thank you for bringing this to our attention!