I do not think anybody here is questioning the legal authority of the PIC. A Copilot not proficiant or capable in being the PF should not even be there. That is the point. This does not preclude the PIC to be PF or take control whenever he deems necessary. The normal case being a balanced job sharing in the PF/PNF environment.
The problem discussed in this thread is the existance of captains that do not let somebody fly for reasons which have nothing to do with flying ability or airmanship - but are purley interpersonal.
Last but not least - a pilot can be suspended from flying as long as the company wants - they just have to pay the basic salary and in that time prove, that he/she is not fulfilling the requirments by other means. So even if it was a SPO it was a bad decision from the company to still grant flights.