If I read the article correctly, Columbia did not exclude him from any campus activity - he just felt uncomfortable going to these things. As for the campus credit, that is literally none of his business. I am not a lawyer, but this appears to be a frivolous lawsuit.
But defamation of character is a crime. If a student was going around stealing cars and the university allowed him to get course credit for the car thefts, then the people who's cars were stolen would have a civil case against the university for helping to encourage the continuing car thefts.
When an institution actively supports and encourages criminal behaviour then the victims of that behaviour have a case against the institution. If the university had ignored her and not commented when she was lugging the mattress around, then there wouldn't be any liability. When they gave her course credit for doing it, they became associated with the criminal endeavour.