In those cartridges the stylus replacement is pretty much the whole cartridge, which it has to be, if you think about it.
I just wonder what that guys platter was made of. We don't know how long it had been in use. However for the output to drop, like that the only possible explanations is demagnetization of the magnets at the end of the cantilever. The chance of both coils failing at the same time is statistically so remote you can forget it.
A cartridge has very few components, so there are few suspects in failure.
I probably installed and inspected close to 1000 cartridges and styli in the ten years I worked at the stereo store- one problem that caused this very problem was caused by the stylus' suspension material failing- the plastic wouldn't necessarily scrape the LP, but it wouldn't cause the magnets or coils to move as they should- they looked normal after removal from the body, but they didn't do what they were supposed to. Between early 1978 (when I started working at that store) and about two years after CDs became available, we were buying some cartridge models by the case and IIRC, those boxes contained 300 pieces- we carried at least five brands, but only sold AudioTechnica in huge numbers at that time. We could use the scope to check for distortion by playing various test records if some wanted, so it wasn't a, "I hope this is right" situation.
But again, he said he was using it for about two hours- I think it was going to fail, regardless of whether he had stopped after fifteen minutes or 59- two hours was its limit by that point.
The end of the cantilever could have been damaged in some way from being removed/reinstalled- it happens more than anyone would want to admit. If the problem was solved by using a different stylus, we can't possibly know what happened without inspecting it.
If he can find someone who has a microscope, the cause might be visible.