It may be that they don't have enough in the program to feel like they could complete a district schedule. It is kind of early, but the UIL wants them to do this at this time so the rest of the district can figure out what it wants to do. And it beats the alternative of forfeiting district games which, in seasons other than 2020, can bring a pretty stiff penalty from the UIL
No, they will not be eligible for the UIL playoffs.