Huh? Sometimes when I lag out or sync-out or similar I get this message when I'm trying to join back to the server. Refreshing the server list in LFS has always cured it for me...
No, he is not stuck online. My guess is that he just timed out from the server and the master host thinks he is still there. Just refresh the server list in LFS and it's ok.
If he really knows who is using his license, it is psorbable that he is sharing his S2 license with someone else.