Can a defined benefit plan stop a current employee's benefit accruals when the employee goes into pay status at normal retirement age and continues to work, if the pay status is elected by the employee? Does the ADEA allow this because stopping the accruals is not "because of age" but because the employee elected to start benefits?

Stop? Not per se, but it is (in my observation) pretty common for DB plans to have language that offsets benefits received against future accruals. The net effect is almost always a benefit (to that employee/retiree) that does not increase. This characteristic helps make 401(a)(36) a valuable option to encourage phased early retirement.