His argument doesn't make sense. There probably will be financial penalties for athletes transferring. If you are getting NIL money by a local booster business, they will drop you for leaving. You can bet those TX linemen getting $50k or whatever will lose that money if they transfer out.
Also, a letter of intent was always a 1 year deal, at least from the school's side. If you didn't pan out they cut you. It's how the SEC oversigns. Now the athletes are as committed to the school as the school is to them.
If you want to stop calling them student athletes, that's ok. Let's call them employees. Employees are allowed to leave their jobs when they want to.