Well, what were the terms of the prepaid? Is he sure they didn't say that any change to the duration could result in repricing? I would expect that to be pretty common terms of a pre-paid.

There's no "nuisance fee" that I see. All I see is that the rental was repriced at the current rate. It was no surprise at all that a current rate might be way higher than a rate reserved earlier (whether prepaid or not).

A rental car company typically has no provision to store a car that was return too early and process it days later. They have to process it when it was returned, and if that's outside the bounds of when the reservation said it would be returned +/- minor allowances, they have to redo the reservation to be able to process it.