Common sense is not a core organizational competency of the NCAA so I understand the question and concern. However when dealing with transfers, the language is always written for the benefit of the NCAA member organizations and from the perspective of the transferee's limited rights as a result of the choice to make the change. So, I think you have to separate out what the player elected to do and what the member organization elected to do....very interesting situation. In this case, it is the NCAA member organization chose to reclassify from D2 to D1, so the question is will they waive or grandfather the player as a result of that change.
No offense to Rick, the man knows his stuff like nobody else on this site and has helped many. However, this is one of those sitations where I think I'd be calling the NCAA 1-877-262-1492 to document the call as further information may be needed. Then I'd talk and consult Rick about details and a possible strategy.
JMO.