Client wishes to re-record an AJ track

There is nothing that says they can’t in the license terms. Their intended usage may however be restricted by the terms, it all depends on what they plan to do with it.

In my opinion you could sell the composition directly to the client. You remain the author and retain all rights. The exclusivity agreement only prevents you from selling the track on another platform, which you’re not, so it’s all good according to me (Envato may see it differently though, better wait for their official response).