Well, that was what I studied some time back when TPS was first announced. My understanding is that a new i-94 has a new expiration date of D/S or duration of stay.
BTW How is it possible that the employment based people will be able to adjust even after being illegal for some time and not the family based people? And looks like he has a stronger tie of his wife petitioning for him here.
If he fails the AOS then he has to go back to Nepal and go through consular processing in Nepal which can be dicey.