H1B RFE for a cap exempt filing

Hi folks, here’s the quick summary of my filing: Had gotten H1B in 2016, went to college instead. Current employer filed for a new H1B, which is cap exempt since I got in the lottery in 2016. I got specialty RFE for the current filing and I am preparing a response with the lawyer. Few questions I was curious about that any of you could chip in:

  1. Since I got RFE instead of outright rejection or denial, does this mean my H1B is actually valid (i.e. cap exempt)
  2. Am I allowed to start work while RFE is adjudicated?
  3. What options do I have if my H1B is denied after RFE? Day 1 CPT? Others?

Thank you in advance!