That is not necessarily the case. The EULA for AutoCAD 2005 states:
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3.1.2 Additional Installation. ...You may Install and Access a second copy of the Software on the hard disk of a second Computer owned by You or under Your control provided that:
- the original and second copies are used only by the same person;
- only one of the Software copies is Accessed at any one time;
- or a notebook computer or other non-server computer away from Your usual work location for the purpose of enabling You to perform work while away from Your usual work location;
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Furthermore, once the changes are made so as the software becomes a network version and uses a valid network license from the License Manger, it is no longer a stand-alone version. The serial number and the license is not bound to the physical media.
The Activation Code for authorization is the mechanism that provides the license to the stand-alone program. Therefore, by switching the network version to stand-alone, you would simply need to re-authorize the copy, per the EULA (Section 6.2.)
If the software is registered and he has the appropriate number of licenses, then he is well within his bounds of the EULA. Re-authorizing the stand-alone would be the proper procedure. The PLU isn't even an issue since he already has the installation on other machines and can infact install a second usuable copy should he need to, per the EULA. He doesn't need to transfer the licenses that he isn't using anymore, just reactivate the new ones.