I registered on this site just so I can set all of you straight. You are confusing your laws of physics and it’s best to look at each force separately.

Lets start with gravity. If the cable did snap and the elevator would accelerate because of gravity (~9.8ms2), everything falling with the elevator would feel “weightless” because their kinetic acceleration would match the potential acceleration of gravity. Keep this in mind.

Now on to buoyancy. If everything is weightless, then there would be no force effecting the air (and everything else) in the elevator. This means the air density will even out throughout the acceleration process. As soon as the elevator hits terminal velocity, this will no long be true.

Net effects on the balloon: During the period where the air evenly distributes throughout the elevator, there will be a “draft” as the dense air at the bottom of the elevator moves to equate the less dense air at the ceiling. After this air neutralizes, the balloon will appear to hover inside the elevator. So the balloon will slowly move up with initial movement of air (not because of velocity or buoyancy) and then hover.