I still don't get it why, despite all the advice you have been given, you do not see that you are now the problem. Here you are restructuring your entire class just to accomodate someone who shows with consistent behavior that he will not comply. When I used to be a counselor, I would describe this guy as someone with a Narcissistic Personality Disorder. Such people cannot be argued with, they do not/cannot listen. Narcissistic personality disorder (NPD) is a personality disorder in which the individual is described as being excessively preoccupied with issues of personal adequacy, power, prestige and vanity - sound like someone you know??
I am a practicing, licensed psychologist. For us, making diagnosis without an actual assessment in simply unethical. Why don't we leave the psychological jargon out of this situation since it adds nothing useful here. Professional lexicons can easily be misused, such as in your post above.
We can all agree that this person is not a positive influence in that dojo. We can all agree that the dojo is now regretting it's initial approach to this person. I think that it is quite unfair to say that this poster is now the problem. He is actively trying to adjust to the situation in a way that fits within the existing limitations of how that dojo operates. I frankly think that this poster is acting in a positive manner and will discover and learn how to best handle situations as a teacher.