Is there common policy in universities about departments or faculty/staff intervening in the case of misconduct related to Title IX?
I have encountered the belief that once this occurs, faculty/staff are prohibited from engaging on the matter further.


I am a former department chair at a large US university. I don’t know what you mean exactly by engaging further, but this belief sounds mostly false to me, or at best a distorted or misunderstood version of something that’s true but doesn’t quite mean what you think it means.

At my university, the department chair will typically remain involved and play an active role in coordinating the university’s response to the incident, usually in consultation with the Title IX officer or similar campus officials. The chair may be advised to not act independently of the title IX office or prior to consulting with them (and even more so to not act without keeping them informed), but it sounds inaccurate to describe this as a “prohibition”. And it’s not the case that the chair hands over the matter to some outside department and then steps away completely from the situation, as the belief you describe seems to be suggesting. (On the other hand, it’s possible that that is in fact the way things work at some US universities.)


  For example, can a department chair enact sanctions on a perpetrator? 


Department chairs have a fair amount of independence to do things at the departmental level. So generally speaking, I’d say that yes, the chair can do such a thing, but whether it would be a good idea or recommended practice would depend on the specific details of the situation, and in the absence of more information I’d assume it wouldn’t be either of those things.


  Can faculty confront the perpetrator and demand their behavior cease? 


Yes, similarly to the above: people can do all sorts of things, but if the matter is being handled by the Title IX office, most sensible people would recognize that letting the professionals (with the appropriate training, legal and psychological background etc) handle it is the best course of action.


  Can it even be discussed?


Not sure what you mean by this exactly. Information about sexual misconduct accusations would generally be regarded as confidential, but department chairs and certain other administrators would have a legitimate need to know and discuss such things, so yes, obviously they can discuss them. On the other hand, they would need to exercise discretion and not share details with random people who don’t have an official reason to be involved.