After fixing this, I ran into a new problem with permuted or scrambled keyboard layouts.
Changing the graphics compression algorithm caused the keyboard map to become permuted. Perhaps something about making changes to a session configuration disrupts the keyboard layout?
Per the advice on
this forum post I removed they X11 keyboard configuration (sudo rm -rf /usr/X11/share/X11/xkb). This broke XQuartz. I moved the X11 folders in /usr out of the way, reinstalled XQuartz, and rebooted.
After that, X starts normally and x2go works. The keyboard map is normal.