As for the hunter derby, as far as I understand people can enter that regardless. I don't recall there being a rule that a 1.60m horse can't show in it. So, he was gracious enough to withdraw and you don't know 100% that he withdrew because of complaints. Just because the horse can jump 1.60m doesn't mean that it will show well in the derby. Perhaps he was trying it out to see what kind of career they could move it to, or perhaps he is looking to market it as a lower level jumper that can do the Eq and the derbies. You don't know.
As long as the rules allow it, he can show at his shows.