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I've used most available services, but discontinued one after another along with promises that a better user experience will be provided with reduced content and removed functionality with the slight price hike. YouTube was my first and last video service I paid for, only Spotify remains on the borderline.
I agree that it's bullshit. He should be stepped up automatically to the next highest plan and billed the old amount. However, their offer would technically be a 2nd free month since he presumably got that first free month that everyone gets (as you pointed out) when he first got the service.
Solid point, although we dont know for sure if they offered a free month back when he started.