Bearing in mind he is also wearing the Golden Jubilee medal (which was given out in 2002 when HRH was only 18 and not even in the military) I suspect he has had the rules waived and been given special permission to wear both. There has to be some perks!
Always been standard practice for members of the royal family to receive coronation and jubilee medals as a matter of course, whether or not they are serving in the armed forces. If you look at Prince Charles & Princess Anne's medals you will see they both have the 1953 Coronation Medal, at which time they were 4 & 2 years old respectively!