One correction:
2. He can also stay on the basis of pending L-1 extension. As long as the L-1 extension is filed timely (i.e. prior to I-94 expiration), you can stay for up to 240 days beyond I-94 expiration date waiting for the result.
In this case, what if CoS is approved but L1 extension gets an RFE after 1st October - can he withdraw L1 extension and continue on H1B? What if L1 is denied (after 1st October), does he lose H1B too?