I think that I just discovered a condition for why Layout Adjustment won't work on existing text boxes. I think that if a page has two layers of text boxes, even if one is hidden, the layout adjustment and liquid layout features won't work.
I spent a ton of time last weekend trying to figure out why layout adjustment wasn't working on my document. I was doing everything right and InDesign seemed to be working fine, but layout adjustment was not doing what it needed to do. Later, in the same document, the last ten pages needed to change from one column to two and I expected to have to do it all by hand. However, layout adjustment worked like a charm. The only difference between those pages and the others was the number of layers with text boxes.