It's legit the problem is the Free to Play upgrade section isn't connected to the in-game store similar to the 'Extras' section that has all the discounted bundles, so the prices there doesn't reflect the recent price drops.
He has to go to the in-game store to get the $2 full unlock
I read somewhere that the price for the level cap was reduced.
The F2P might've not had an update or something.
People have claimed to be able to play coop and get the star as long as a Disc-Based player brings them into a custom game.
I haven't tested this, but it might be worth a shot.