Yes, your son can walk away from NROTC definitively before day 1 of the start of his sophomore year and not owe moneys back to the Navy who covered all tuition, fees etc for his freshman year. In that sense, it is free. If he has decided he does not want to be a navy officer, then best that he does not continue. That's in-part what this first year is for - to help separate out those who truly want this path from those who thought they did, but who do not.
Recommend your DS fully look into the paths of enlisting after college including OCS v enlisted paths since he will have a 4 year degree. (and if OCS, why not just stick out NROTC)? It's unusual to my understanding to enlist with a 4 year degree but not go the OCS route - maybe others have details. Also research just how many world class athletes/ top performers/ elite warriors / amazing people scrub out and don't make through Seal training end to end ("A" school, the infamous hell week, parachute school, seal qualification training etc.). Lastly he should understand *if he doesn't already the housing quarters / housing allowance for an officer/ pay benefit gap between enlisted and officer paths, and as a counterpoint the bonuses that enlisted are eligible for that in-part closes that gap. The well may runneth deep so perhaps he's not focused on money, but when a future mrs mattbv jr wants a nice house in the right school district, and the safest minivan to transport their little angels while he's off saving the world, and it's time to buy diapers/formula, or the dog needs another 2.5k surgery... I have a brother in law who enlisted and a cousin who is an officer - they lead vastly different lifestyles. I think most seals are living their dream and don't care, but most people who want to be seals don't make it.
OK, you asked, does it look good that your son committed and then dropped from the Navy's reserve officer training, when pursuing joining a special warfare group for which unwavering commitment is their jam? where see-it-through resolve is paramount - more than almost any opportunity on earth? Probably not. I think this could be a small mark on his record that doesn't bring smiles to the command committee making the lists.
But I see a potential much higher impact risk with your son's desired path than whether he dropped NROTC. If he's at an ivy and thriving, he'll likely knock the cover off the ASVAB. Like my brother in law who rocked the ASVAB, your DS may end up slotted into a enlisted career path for which salivate for those with specific off the chart aptitudes - nuc tech, avionics tech, electronics tech, etc. vs going the (NEC) 5326 Combatant Swimmer (SEAL) enlisted or 1130 Special Warfare Officer route. The navy puts the needs of the navy first and OVER the dreams of those who sign up. Recruiters professional and military don't always paint a realistic picture. I see uphill challenge to your son's path - he should pursue it but get armed with all details/ facts he can. *Of note, I've personally taken on a few uphill challenges myself and don't regret any of the successes or failures I've had when I did - in fact I'm glad I went for it -here, just trying to highlight reality.
Like all of us -we try to help our children avoid OMG - what did I do moments of regret. Best of luck to your DS and you.