This is completely insane. Anyone filtering out qualified applicants based on their names is messing up.
Ideally the process is blind to avoid bias but that isn't how most people operate. In this case rejection is based upon his perceived behavior, because abbreviating a last name to a single letter to avoid identification is a lot more common than single letter last names.
This was an article about a dude adding Mr. in front of his name Kim in the CV to land a job.
This is insane but there is a lesson that even a small thing might affect your resume.
Not at all surprising. I used to work with someone whose first name could have been either male or female, so he always included his masculine middle name when signing email, etc.
I assure you they filter based on that and on your top level domain in your email address.