This is not the end of his education and it’s not the end of his life.
He needs to come home and get a job. Any job that requires him to wake up, put on shoes, and get out of the house. Once he’s cleared to return to college, he will do that, and then will finish and graduate and get on with his life.
I know you are upset and scared. But if you catastrophize this by thinking it’s the end of the world- he will adopt your behavior and that’s not productive. They are letting him return under their conditions- it’s their college- so the faster he starts working the program, the sooner he can get back to it.