Yeah, looking at the above code again, I don't know about the "!$vbulletin->options['verifyemail']" part, I assumed you knew why that was there. Maybe try taking out that check?
I was asking above if you had code that set the user title to 'Deactivated' - what code is doing that? If you can find where that's done, then you should be able to add the update of the useractivation table at that same point.
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