Naval officers must formally and proactively request a release from their commission from the Secretary Of The Navy. There is no such thing as an "automatic termination" of a commission.
Sorry for yelling, just so many innacuracies on this thread.
Those officers who do not formally request a release from their Naval commission are effectively in the inactive reserves forever.
Kerry evidently waited until 1977/78 to make that request. There's nothing mysterious about it at all.
Then where is Johnny Boys request?