I actually think Disney made the right choice on how they handled turning red and encanto. COVID still effects kids and both were both released during colder months of the year when that type of virus can spread more easily.
Add to the fact that Omnicron was starting to really spread in November ( which is when encanto was released) and that there wasn't a vaccine approved for ages 5-11 until late April 2022. You can see why it was an issue