Google's John Mueller said on Twitter that when a manual action is removed, the site is immediately free of any manual actions. But, sometimes it can take time for search to process the manual action. He said however, the effects of that might take a bit of time to be reprocessed."
Here are the tweets:
Rankings change automatically as we recrawl & reprocess content + signals, both on your site as well as across the web.
— 🍌 John 🍌 (@JohnMu) October 18, 2019
Once a manual action is removed, the site is immediately free of the manual action that was affecting it. However, the effects of that might take a bit of time to be reprocessed.
— 🍌 John 🍌 (@JohnMu) October 18, 2019
In short, when Google removes a manual action - the system no longer has applied that manual action to the site and or pages. But it can take time for Google to process the change through its index and ranking systems. So the new signal that the site does not have a manual action has to cycle through Google's ranking systems I guess?
Still, even when that happens and your manual action expires or is removed, some algorithms may be still upset.
Forum discussion at Twitter.