If Duke doesn't release their transcripts, for academic purposes, their Duke coursework doesn't exist and they cannot use it as a basis for transferring and enrolling as a full time student elsewhere.
Well, they can enroll anywhere else full-time, and I'm not sure about whether Duke would be able to withhold the transfer of their transcripts to a new school. There would be no legal basis for them to withhold them. So, I don't believe you are right about this. You may be, but I don't think so.
It is not that Duke would not release their transcripts but rather their transcripts would reflect that they are suspended. Most other schools as a matter of course do not accept students under suspension by another school.