From what I'm reading here, and we immediately sought legal counsel on this, they're totally free to move out anytime they want.

An LLC does not provide much legal protection, it acts as a legal firewall to separate assets.

Regarding number one, while it may or may not be legally necessary (not sure), I think it's a good idea to have a separate account for each entity.

A non conforming unit is technically legal but it doesn’t meet current zoning (but possibly was once a legally functioning unit as a residence).

Generally there is consensus that DSCR Lenders can only offer a 1% prepayment penalty for up to 3 years in MI, but some lenders have recently reportedly been flaunting this rule - I would just tread carefully here in this area, generally not advisable to get potentially tangled up in a flawed legal doc with a non-sophisticated or fly by night lender

It makes ADUs under 900 sq. ft. in SF zones legal BY RIGHT, statewide, starting in February.

The next question is whether the property has the zoning to legally operate as a 2 or 3 unit building. 

Exhibit A -a page with the legal description of the property  3.

I sold a property last year that required the owner to get a certificate of nonconformity to be a legal two family.

Taking legal action against another party necessarily involves questions of law and can result detrimental legal impacts on him if he files a lawsuit without proper grounds to do so, or where the opposing party may have counter-claims against him.