Riley mentioned in his press conference yesterday that they would have honored Allen's scholarship when asked about the injury. Based on that, I don't see Riley going the way of Alabama, etc. Now, if the player has graduated, is still eligible, and not contributed, he might be on board with that.
You can also put a kid on a medical scholarship as we did Blake Lawrence as just an example if its legitimate. However, schools like Alabama and Ohio State have misused that option in order to get kids off of scholarship.
Agree with your last sentence and I have already stated as such in another post.