Will steel continue rusting if it's completely covered in concrete?
No.It will continue rusting and the volume of the corrosion products will crack the concrete. New unrusted rebar will rust ( in concrete) but at a lower rate than your "prerusted" sample. Best practice is to epoxy ( or otherwise coat ) new construction. Stainless rebar is occasionally used. Bridges are a very severe service for rebar corrosion ; rebar in locations where the concrete is never wet do not have corrosion problems.