I found that the following setup seems to have both Enemy and Interaction Target Focus working as expected:

Standard Settings:

Enemy Target - Disable
Interaction Target - Enable

Custom Situation:

Events: PLAYER_SOFT_ENEMY_CHANGED
Condition Script: return UnitIsEnemy('player', 'target');

Situation Settings:
Target Focus - Override Standard Settings
Enemy Target - Enable
Interaction Targget - Disable

It switches back and forth seamlessly.

Perhaps this could be incorporated into the core functionality of the addon, or at least as one of the default "situation" presets?