At the end everyone would be happy except maybe you but a GM must do some concessions for the game sometimes.
There has to be a balance. Going to either extreme simply doesn’t work.
If, as GM, he’s feeling like these problematic players are seriously disrupting the balance of the game, then he’s got to decide how he’s going to handle that. Something will have to give, somewhere.
Ideally, a compromise would be able to be reached where both parties get what they need and at least the majority of what they want, although neither party may be 100% satisfied.
If a compromise can’t be reached, then both parties have to decide how they’re going to handle that.
I think the details of the various options have already been well explored.
But one way or the other, there has to be some sort of balance.