I have a 12 year old....I'm no expert and I'm not a coach...but my kid can hit and I have listened to hundreds of batting practices. My comments are:
1. Why is his back foot coming off the ground at all? If you look closely he is not pivoting his back foot he is actually lifting it up, moving it, then pivoting. He took away his base of power which throws him off balance. Try going back to the basics of squishing that bug.
2. He looks too tall in his stance, he's actually coming down to hit the ball at which point his weight isn't shifting from his back leg to his front leg because he's barely got any weight on his back leg. He should start a bit lower, weight on back leg, then transition the weight from the back leg to the front, this will bring his hips around more naturally because right now he is getting his hips around but it's out of memory not mechanics and I'm not seeing an actual balance transfer.
Those two main things can throw off his balance and if you don't have balance while hitting it's not going to work....biggest problem in my opinion is lifting up that back foot at all...he seems so focused on turning his hips that he isn't remembering to pivot.
His back foot is coming of the ground because he is literally winding up and "running" to hit the ball. It is the Happy Gilmore approach.
I would stay away from Squishing the Bug. That is not good technique - leads to spinning. Right now I would not worry about the hips and back foot. He needs to get the weight transfer and balance down -- inside to inside and fix the long hand path.
While squishing the bug is bad long term it puts kids in the mindset to pivot that foot...don't you think "running at the ball" is throwing him off balance and if he kept that foot on the ground it would help?