There were endless moments in season 3 that would have been solved by reaching out to the progressive Borg collective from the season 2 finale. Not to mention that a few character arcs and character development moments that just seem suspiciously absent in season 3. So, is the entirety of season 2 not cannon or am I missing something?
Not retconned, but I definitely feel like they wanted to forget it.
Absolutely. There's a line in Season 3 that really stuck out to me. I can't remember who it is that says it, I feel like it's Raffi or Crusher, but they say "No one has heard from the Borg in 20 years." So either the events of Season 2 were extremely and heavily classified to this individual, the realization of them being a 'new Borg collective' is believed with utter certainty to the point of not even considering them Borg, or the events didn't happen.
They wouldn’t be the only ones.