I think I found a fix. Once I ensured we had the audio sesstion setActive call, I was able to catch that it was also failing.
In another FMOD forum post someone on the FMOD team mentioned: “We had some troubles a while back with certain devices reporting init errors because the internal audio state was in flux. Generally closing the FMOD system and try again was sufficient to recover.”
So, I took that 1 level lower, and would retry (after a small sleep) the setActive call, and it works.