Yes. Happens often. Politically speaking, the Government is well known for dropping cases that may lead to unsatisfactory judgement or precedent rather than following through and putting up with the flurry of resulting appeals to vacate convictions based on a nullified law since judicial nullification is retroactive.

The trick to keeping something unchallenged is to only enforce it against people they are fairly certain they don't have to worry about challenging it in a substantial way. Only people with standing can challenge it, and once you're in a position to challenge it, your defense is unlikely to go down a route to nullify. Nevermind that there is a prevailing ethos of minimizing the impact of a decision on the body of case law, so it is extremely difficult to make a compelling argument to get a law nullified unless it is extremely and obviously egriegious in nature.