Had I done this in the first place I would have realized that the keyboard and trackpad also weren’t working in recovery from a different device, which is a big clue. Next I tried booting to Catalina Recovery Mode via Catalina USB installer (make a Catalina USB installer, plug it in and hold the ALT key prior to boot chime of macbook). Still not working I copied the old preferences back to the original location and skipped the existing files. Upon rebooting MacOS rebuilt the users preferences as if it was a new user signing in. Then I moved, not deleted, the Users Preferences folder. Mouse Keys and Sticky Keys were not turned on. After that didn’t solve the issue I checked the Accessibility (System Preferences/Accessibility/Keyboard|Pointer Control) options for both mouse and keyboard. Then I updated from Yosemite to High Sierra to Catalina (cause it should be updated anyway).
Hence I thought it was a software problem. After logging in they would stop functioning. Reason I turned of FV is because when I would reboot the system I could use the keyboard and touchpad on the Air. Then I turned off FileVault (System Preferences/Security & Privacy/FileVault). Then I did a Time Machine (System Preferences/TimeMachine) backup because that’s the first thing I do on all customers macs that involve potential changes. The Air had I started off by verifying that a USB keyboard and mouse would function. I solved the issue on a Macbook Air mid 2013.