This is a conversation you both need to have with the college to get a better understanding. My son did Business Studies BTEC alongside his GCSEs at level 2 and is now doing level 3 alongside his A Levels. He is a bright boy who was in a challenging school for GCSE years but did well despite not having teachers for every subject. I'd imagine that the college doesn't have the evidence to support any confidence in the level 3 BTEC being realistically achievable for your son. If he's genuinely passionate about the subject, and he's willing to put the energy, effort, time and attitude into his college experience, he needs to make that clear to the college.
Could it be an option for him to do the lower level BTEC to prove his capabilities and commitment?
If he's thriving in his own entrepreneurial enterprises, that's brilliant. Academia isn't for everyone. One of my children will be pursuing a degree apprenticeship in business which will mean he's earning alongside getting the next level of qualifications, contacts and experience. Another left 6th form college because she wasn't happy with the course. She went straight into working full time and she's doing amazingly, she's dedicated, well paid, and has been given responsibilities and training development.
So I recognise the power and importance of practical experience, and when A Levels aren't the right fit for some young people. My fear for your son is that his future options will be limited with the qualifications he's got under his belt.
You say his mates didn't get GCSEs either? Are they still a big group of friends? What else do they get up to? What are their and his ambitions? Where does he see himself in a year? 2? 5? What are his values? What matters to him? What sports does he play? What volunteering has he done? What work experience does he have? What's his part time job? He's going to be competing with kids with all of that. In his part time job, what does his employer say about him? Is he reliable? Curious? Hardworking? A team player? A quick learn? What's he doing when he's not in college?