What does a failing grade accomplish? Is that kid going to remember his director as a jerk (right or wrong)? Will that incline him to dissuade his kid from being in band? Or maybe not vote for legislation(ors) supporting the arts?
I appreciate your concern on this, but I promise that the way you think about this situation is radically different than the way this kid is thinking about the situation.
Follow the guidelines of your admin and give the kid the best “low grade” possible.