i'm an ex financial journalist and spent most of the last ten years writing stories about anti money laundering regulations tightening. I have no insight to this specific issue but it fits a broader trend of banks taking an over rigorous approach to new rules because non compliance fines are huge. Nigel Farrage and Couts is a good example of this. Given what ive read about Bangkok Bank that is almost certainly the explanation- hopefully others have ideas on how to unlock it. good luck
the not wanting to deposit cash thing is a symptom of narcissistic personality disorder- they love control and money, so it bothers them. Roughly 50% of the expats are in Thailand NPD, so this guy should fit right in
defo get a Thai accountant, and asap, the Thai tax authorities dont allow extensions on filing so you need to get everything sorted ahead of time. And good luck!