It's the tradition between both countries to confer the title of honorary General to each other's COAS whenever they visit each other's country. The news you posted is wrong, we aren't making him honorary COAS, just a general.


http://www.ndtv.com/india-news/army-chief-bipin-rawat-to-be-conferred-with-honorary-military-rank-by-nepal-1674604

"As a tradition between the two national defence forces, Nepal President Bidhya Devi Bhandari will confer the honorary General of Nepal Army to General Rawat at a special programme at her official residence 'Sheetal Niwas' tomorrow."




Same goes to Nepali COAS visiting India:
http://kathmandupost.ekantipur.com/news/2016-02-04/coas-gets-hon-rank-of-general-of-indian-army.html


"Feb 4, 2016- Chief of Army Staff Gen Rajendra Chhetri received honorary rank of General of the Indian Army from Indian President Pranab Mukherjee amid a special ceremony held in latter’s office in New Delhi on Wednesday."