My understanding is that it is does create an RMD for the year of termination, and the RMD amount, which was part of the rollover, is then not eligible for rollover. The participant asks the rollover receiving account to return the RMD amount to the participant, or (if I correctly recall early threads on this topic) if there is still enough remaining in the participant's plan account, it could be distributed to the participant in cash from the plan to cover the RMD for the year the participant terminated.