If someone deposits a checking into an interest bearing account, but the qualifies for the large deposit exception hold, then do those funds still accrue interest? Or is that a bank by bank situation?

Reg CC 229.14 governs when interest begins to accrue on deposited checks whether or not a hold is placed.

a) In general. A depositary bank shall begin to accrue interest or dividends on funds deposited in an interest-bearing account not later than the business day on which the depositary bank receives credit for the funds. For the purposes of this section, the depositary bank may--
(1) Rely on the availability schedule of its Federal Reserve Bank, Federal Home Loan Bank, or correspondent bank to determine the time credit is actually received; and
(2) Accrue interest or dividends on funds deposited in interest- bearing accounts by checks that the depositary bank sends to paying banks or subsequent collecting banks for payment or collection based on the availability of funds the depositary bank receives from the paying or collecting banks.

An institution may elect to begin accruing interest sooner (such as the day of deposit) if it chooses.

Thank you Brian, I appreciate it sir!