Assuming his narrative is factual they are accusing him of a violation he did not commit and he is now being threatened with expulsion as a result.

True, but accusing him of a violation privately, to him, is not defamation. Accusing him publicly is still probably not defamation. Whether he violated certain terms of service is something that would ultimately need to be decided by a court, so them believing he did so isn't defamation even if they're wrong.