According to your reference in 240.4B yes it is allowed. As an Engineer, he has the final say as to what he will stamp and what he won't, whether it meets code or not. Good design may have other reasons may preclude the use of the 400 amp, 100% rated breaker. Anyway, it is his choice to stamp or not, right or perceived wrong.
Look for options acceptable to him, such as a 100% rated braker with (I guess they may be called) replacable current modules. Or a permanent plaque stating maximum rating the breaker may be adjusted to.
