Your son, after graduation, should be able to earn base pay at the O-1 paygrade over 2 years of service rate, if he has served at least 2 years. The pay bumps are at 2-year intervals. All others new to service will start at O-1 under 2 rate. That’s a clear plus.
I think the way it works is his enlisted status was closed out the day before he took the oath as a new cadet. Any ADSO from that enlisted contract is waived. The new ADSO commitment relates to the 4 years at USCGA and what he owes as a commissioned officer. They invested 4 years to train him as an officer; they want full ROI as an officer.
Down the road, if he stays to retirement age, the enlisted time should count. His SA time does not count toward military retirement.
Also down the road, whether he separates or retires, his enlisted time, USCGA time and officer time can be calculated into federal civil service retirement years.
Caveat: I speak from knowledge of the DoD armed services. It is usually the same for Coast Guard, but there are some anomalies, so my comments above are assumptions. The USCGA cadet pay office can tell him.
Just so you can see, here are the 2023 CG pay tables. Look for 0-1 under 2, then over 2, possibly even over 4.