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apply false

in the settings script is actually pointless. In the settings script you anyway just define default versions for plugins but do not apply it anywhere. Building the subproject should work fine. Hard to say what the problem is without more information or an MCVE. Besides that, I would instead recommend using a version catalog instead of defining the version in the settings script.

Is a version catalog preferred over Convention Plugins? I adapted my project from the gradle init multi-module project but was always running into issues using the Convention Plugins as the Kotlin JVM target is always set to 20 despite my attempts to change it to 1.8. So the convention files are still present but unused.

I wouldn't say preferred, as they are completely separate things. You typically use them both.

I'll look over the gradle init project more closely as it doesn't have the errors I'm hitting. Although I do have to set apply false in my settings.gradle.kts or I get a build exception. It does look to try applying the plugin to the parent project.

An exception occurred applying plugin request [id: 'org.jetbrains.kotlin.jvm', version: '1.8.10']
> Failed to apply plugin 'org.jetbrains.kotlin.jvm'.

Although I do have to set apply false in my settings.gradle.kts or I get a build exception.

Oh, you have it in top-level

plugins {
    ...
}

then I guess. I assumed it is in

pluginManagement {
    plugins {
        ...
    }
}

where it belongs to define a default version if no version catalog is used.