Introduction Acute encephalitis syndrome (AES) in pediatric patients can lead to a range of disabilities, affecting various aspects of their daily lives. The disease is caused by a diverse group of pathogens including viruses, bacteria, fungi, and protozoans. While significant progress has been made in combating the acute phase of the disease, the lingering effects on the physical, cognitive, and emotional well-being of survivors have yet to be comprehensively explored. The present retrospective study was conducted to investigate disabilities including neurological squeals and functional impairment challenges faced by AES survivors as they navigate life with disabilities. Methods We conducted a comprehensive retrospective analysis of medical records of pediatric patients diagnosed with AES and evaluated their follow-up visits at regular intervals during the study period. The Liverpool scoring system and clinical examinations were utilized to assess the presence and severity of disabilities in the patients. Results A total of 134 pediatric AES patients were included in the study; among them, 56% were males, and 44% were females. The mean age of the participants was 4.8 ± 3.1 years, and the mean number of days of hospitalization was 27.8 ± 30.8. Only 9.7% of the patients were found to be Japanese encephalitis (JE)-positive, and 87.5% of the participants were found to have disabilities in some or the other domain of the Liverpool Outcome Score (LOS). There were statistically significant correlations between the age of the patients and the LOS at follow-up. Post-recovery disabilities were more severe among patients who required a prolonged duration of hospitalization. Conclusion A considerable proportion of AES survivors are left with disabilities. Causes other than Japanese encephalitis are now more frequent in AES. The need for prolonged hospitalization is related to more severe disabilities. The early identification of disabilities through the Liverpool scoring system and clinical examination can aid in implementing appropriate intervention strategies.