Can all files be removed in the user’s bash session directory

Yes, it's certainly possible, but you'll need a bit of scripting knowledge to do it entirely. I wish I had a more elegant solution to edit things in place, but here's ham-fisted option if no one has a more surgical option.

I typically use slapcat to dump the current user details to a text file and then process is using perl or whatever other tool you want. Since it's one file, even TextEdit can do a search/replace. By putting the users in a group, you can specify that in slapcat.

At this point, I'd convert that text file into the import format that server app wants - see it's help guide - Server Help: Create a file to import users or groups (or click this after pasting it locally to your Mac help://bookmark='https://help.apple.com/serverapp/mac/2.2/help/index.html?localePath=English.lproj#apd41051F16-D4B7-464F-BD1C-0CBEDF7CA29A')

At this point you could delete the affected records and re-introduce them with the correct home directories.

Did you change PROMPT_COMMAND? The default PROMPT_COMMAND is defined in /etc/bashrc:

# Tell the terminal about the working directory at each prompt.
if [ "$TERM_PROGRAM" == "Apple_Terminal" ] && [ -z "$INSIDE_EMACS" ]; then
    update_terminal_cwd() {
        # Identify the directory using a "file:" scheme URL,
        # including the host name to disambiguate local vs.
        # remote connections. Percent-escape spaces.
        local SEARCH=' '
        local REPLACE='%20'
        local PWD_URL="file://$HOSTNAME${PWD//$SEARCH/$REPLACE}"
        printf '\e]7;%s\a' "$PWD_URL"
    }
    PROMPT_COMMAND="update_terminal_cwd; $PROMPT_COMMAND"
fi