Can EXE generated by cx_freeze be completely decompiled back to readable Python code?

In general - no. CX Freeze and py2exe store the PYC version of your code, the bytecode compiled from the PY files. Currently, if I am not mistaken, there are no working viable PYC decompilers. Some give you a more-or-less readable byte code with annotations, but none will give you the actual Python source code. So in that regard - no, it cannot be decompiled. You can also consider going the full native way and use Shed Skin

It seems that the current accepted answer is no longer true.

Here is how to recover the original source code from a project frozen with cx_freeze.

Note: it is done here on a "Hello world" project, but, using the same method, I've been able to decompile a 1000+ lines-of-code source code from a project of mine frozen with cx_freeze, and recover nearly the original source code!

1) Use cx_freeze

Create a test.py file containing

import time
print('hello')
time.sleep(2)
print('world')

Then create the executable with

cxfreeze test.py --target-name=test.exe

Then usually you'll distribute this to the final users:

Now let's try to reverse engineer this!

#2) Get the .pyc bytecode

Open dist/lib/library.zip and extract the file test__main__.pyc.

#3) Now use decompyle6 to get the source code

import uncompyle6
with open('test_main_reverse_eng.py', 'w') as f:
    uncompyle6.decompile_file('test__main__.pyc', f)

#4) Surprise...

Here is the original source code!

# uncompyle6 version 3.7.1
# Python bytecode 3.7 (3394)
# Decompiled from: Python 3.7.6 (tags/v3.7.6:43364a7ae0, Dec 19 2019, 00:42:30) [MSC v.1916 64 bit (AMD64)]
# Embedded file name: test.py
# Compiled at: 2020-06-16 21:02:17
# Size of source mod 2**32: 58 bytes
import time
print('hello')
time.sleep(2)
print('world')