CD, you've said a few things that I find disturbing.
First, the representation that Jason is not a tec diver, he has never done deco, etc - and this somehow makes his choice of gear "wrong."
You are the one who is wrong.
I have witnessed exactly one "real" OOA. Witnessed - I was not a part of it. The diver with gas got mugged.
Now, pehaps you teach the nice "slash hand at throat and wait" nonsense, but its not the truth in terms of how it happens in real life. In real life the bubbling thing gets TAKEN. If a fight ensues for the bubbling regulator, TWO people are likely to die, and one almost certainly will.
If the donor has his backup hanging securely around his neck, he KNOWS where that one is. There is no need to "take back" the bubbling one, because he has another perfectly good one - and he KNOWS its good. Since he will never give that one up (the hose is too short, for one thing), he'll want a nice-breathing reg on there, not some P.O.S. diveshop special that MIGHT provide enough air, MIGHT work and MIGHT not breathe like a firehose or be full of dirt, sand or rocks.
Second, reality is that not everyone dives with the same gear. Perhaps in your utopian view where you have a nice captive audience and can try to cram gear down a newbie's throat (to your profit, of course) that's the way the world works, but its not the way the REAL world works.
In the real world people wear stab jackets, they wear back-inflate jackets, some of them have weight integrated (with varying ways of releasing it) and some have traditional belts. Some wear their belts over their BCs, some under. Some even wear theirs under their crotch straps (me, for instance.) Some use (horror of horrors) a HUB! One lady who dives with my on occasion has one - am I to refuse to buddy with her because she wears something different than I do? No. They all hold a tank, they all have two regs, a SPG, a depth gauge, might have a computer, provide buoyancy control and are fastened to you in some way.
Now if the deal is one of you wanting him to wear gear he already has, provided its in decent, servicable condition, that shouldn't get anyone's dander up.
But if you want him to BUY gear from you, that's a different matter. That's indentured servitude and, unless you disclosed this requirement up front BEFORE he took the class, you've got no right to do that.
IMHO you should offer to provide the gear, owned by you, to Jason for his use during the time he is teaching for you. You might also want to rethink your aversion to the long hose and bungied backup. It can be used comfortably with some (but not all) conventional BCs, and if its a 5' hose it can be used with virtually all (needing no place to route as it goes under your arm.)
There is no reason to have a hiss about the long hose. As for the type of BC, I would not care what a shop wanted me to wear as their DM if it was provided to me at no cost to me for my use while teaching. Note that I'm not saying you should GIVE him a BC - it should be your BC, but he should have the use of it, and it should be kept in "near-new" condition (at your expense and trouble) since you ARE making the representation that this is done for the benefit of your sales.
The rest of the complaint you posted - including ripping hmi for helping his girlfriend - is a bald-faced attempt at character assasination and is un-called for. You do not need to have an instructor's card to teach someone a thing or three, nor to provide them with more-experienced help. That's simply a complaint that instead of him sending her to YOU to spend money, he took the time to dive with her instead.
This is a complaint - that he dove with her instead of getting her to shovel money into your till? On what basis?
IMHO you have some self-examination to do here. Jason might not be the best diver you've seen, and he may not have been diving for a very long time, but if you deemed his experience adequate to enter into your DM program, then you did. At that point you have called him "ready" from a mastery-of-skills perspective - so any rip on him about that aspect of things is, in fact, a rip on YOU.