This is OBE since he had a 16 September port call but I thought I would add my 2 cents. By way of background, I am a retired Chief and spent my 24 year career in Personnel almost exclusively in enlisted assignments with headquarters tours at AFPC and two MAJCOMs. I am also a 2016 parent.
The purpose of “having your orders put on hold” is to keep from spending PCS funds unnecessarily while a decision is rendered on the application. However, since this airman is a mandatory mover coming off a short tour in Korea, the DEROS trumps the assignment deferment. The AF can't leave him hanging in Korea while the academy considers his application.
Once he reports to his new base the MPF should enter the assignment availability code (AAC 05) to keep him from PCSing until he hears from AFA. The deferment will really be meaningless though since he will get a decision from them before he meets the minimum time on station to PCS again. If he is not selected, the AAC is removed and he is now eligible for an enlisted assignment in the normal rotation. If he is selected, the MPF will cut orders for him to proceed to AFA. Looks like the system worked like it was supposed to unless it changed since I retired many moons ago.