You are almost correct.
If he is applying for what I think he is and it is approved, he will receive a medical exemption for this semester. This is not to be confused with a medical redshirt. I'm familiar with the medical exemption - we are currently going through this with our guy and just filed the paperwork. It basically wipes out enrollment for the semester and also exempts you from the six completed credits requirement. But you need a documented health issue for this. Which, I surmise was why it was announced that he was leaving for a health issue.
By doing this his clock will reset and he will be considered a grey shirt, or a member of the 2019 class should he choose. Just like Brooks, Beard, etc. So he essentially will be able to redshirt another year besides this one if needed. This is true even with full time enrollment in January. This is the way a grey shirt works.
....HR explodes in 3, 2, 1...
Pretty smart and perfectly legitimate way to handle this according to the NCAA.
Caveat - this assumes some things which I'm obviously not privy to. But on the surface it sure looks like this.