Yes, I would expect he is still studying, living with parents and receiving monthly living allowance from them.
I consulted a registered migration agent and received advice that the rule would apply at time of decision for parent visa.
This morning, I called DIBP and the lady on phone said the rule would apply at time of application for parent visa. I did describe the possible case in detail, in which the dependent is 21 yo at time of application, but may be over 23 yo if it takes 3 years to process the parent visa (which it is right now).
I know advice from DIBP is more reliable but it is verbal advice. Is there any way I could get a written (by email at least) to my query from DIBP?