This will kill almost all new investments immediately. Investors will balk at ~50% of the shares of a brand new company being owned by an ex-founder no longer involved.

Yeah, I think it will be better if OP can reach an agreement somewhere in the middle where they retain just enough shares not to interfere with future investment. 10% of something is better than 49% of nothing. Plus they can collect some cash while the other founder and/or company still has money left, which again is strictly better than shares of an uninvestable company.

How does it matter if it’s going to be diluted anyway? Investors will get their post-money 30% equity, or whatever it is, and rest of the shareholders will keep their proportion of the 70% (and ~50% pre-money gets diluted to ~35% post-money).

From an investors point it's very unattractive to invest in a early-stage startup where half of the shares are in the hands of a person not working there anymore.

I'm interested in coming to an agreement, I have not much to gain in holding on to all my shares.

Make sense but 60k for 600k in revenue with a pipeline to 1m or more it's quite small.

I'd try to negotiate at the very least and keep like 5% instead of 1%

Agree with that