On that we agree. But, for all the reasons that have already been outlined here in this thread, I and most of my contemporaries, do not think that an officer who has declared an intent to separate is best suited be be a DH/CO/Etc. It is also doing a disservice to another similarly qualified, albeit marginally less so, officer who will be robbed of an opportunity. The end result is that neither qualified officer makes DH/command when one of them could have, were the EPs managed correctly.
You may not agree, and if you're in a position to be a RS, you can rank accordingly. I hope you discuss with your #2 why you're flushing their career down the toilet for, from where I sit, no good reason. You may find that your perspective changes if you have to make this call in the real world, vice an abstract discussion on AW.
I'm an asshole and would have no problem telling a guy he sucks, or wasn't quite good enough. I do it all the time already.
I hope that one day I can be a RS. I wouldn't rank someone because of another person's choice, because that means they didn't earn it but they are getting their ranking due to the decision of one of their peers, which is completely wrong in my opinion. They should be ranked purely and entirely on their performance and suitability. In this theoretical, what they do after they leave my fiefdom is between them and the Navy.
I could go on a larger rant about timing, etc, but I think the impending FITREP changes may resolve some of those issues.