I kinda have to agree with that. You are buying a MYW, non-discounted package. . .if you pay a package for 4 adults, you get the credits for 4 adults during
free dining. That is how Disney set it up. . .it is tied to the number of nights you book the hotel for. Not everyone in the party has to have length of stay tickets. . .nor do they have to use them. Is that correct? Now I may be wrong, I can't seem to find anything that says differently though. So. . .if you pay for a package of 4 and somebody gets sick. . .doesn't use their ticket at all. . .maybe doesn't even go. . .does that somehow mean you are not entitled to the credits that go with the package you purchased?

The only restrictive language I can find is that the package credits cannot go to someone who is not included in your package. So apparently you are not allowed to buy some nice, young couple lunch with the CS credits you have left over.
I don't see how he is not fulfilling the requirements. . .and he may or may not be lying about the child. It just sounds like that child may or may not be able to go.