It only makes the loose neutral hot when something is plugged into an outlet on that circuit. The connection is made inside whatever is plugged in. The breaker would trip if there was a short, but in this case the loose neutral now can carry the hot load but there is no real short because the now energized neutral is not bonded. Nothing works when plugged in downstream because there is no bonded neutral to complete the circuit. That's why I asked to start with if anything was plugged into that circuit.

I've seen this exact thing twice before on old back stabbed device circuits.