Or, it's their right to say "no" (or just ignore the rule he's concluded is bad) and have a power struggle. Which is what I expect may happen at this company (not advising it, but what may happen). Or have an adult discussion about it
The new manager may not politically have a chance in hell of being able to fire the guy. Or he may replace him easily and fire him. Or realize he really is trying to cut everyone's pay approximately 15% and back off.
There are lots of ways this could happen.
That said, I do agree with you, moving on often has the smallest amount of conflict. Very possibly what the guy should do.
Actually, in many enterprise orgs, one of the key strategic questions of IT is whether or not to even have a dev staff. That is the whole "build vs. buy" discussion.
And frankly, the startup world should be jumping for joy over this - the lack of quality internal dev staffing is exactly what creates the need for larger enterprises to purchase outside products, and therefore create a market for startups.
There is a larger ecosystem at play here - if/when every enterprise-level company starts becoming a good place to be a dev, then their own internal capabilities will become greatly magnified, there will be a correlating decrease in their decision to purchase 3rd party products, and the market for startup-created products will decrease in turn.
I think you mean that it is okay to quit if the rules change by someone else's accord...
The young engineer feels that they are a gift to their employer, and should have the freedom to work as they want.
The older manager feels that the work environment has a structure inherent within it, to which people are expected to comply.
As the engineer, it is your right to quit if you don't want to play by the rules.
As the manager, it is your right to fire people who won't work within your guidelines.
Either way, it is not a privilege on either side, nor a punishment if one side or the other decides to end the relationship.
It is simply two incompatible perspectives. If neither side will change, best to move on.