Locking XP doesn't eliminate banked levels, just prevents them from being cashed in and leveling you. If you turn your XP on while you're still subbed, you'll level.
You can lock your XP without a sub, but you can't turn it back on. So if you have banked levels, you need to lock XP before you sub, then put in a ticket to have a GM turn it back on for you after your sub expires.
@Fry did some awesome testing for it here -
https://xpoff.com/threads/banked-xp-7-3-5-f2p-only-reuploaded.74864/#post-1113483. Everything I've seen has confirmed that after upgrading my f2p account. I haven't actually forced a character to level yet, but I still had banked levels after getting a GM to turn my XP back on.