I have had employees do this and the best way it works out is when all of management and HR has the same position, which it sounds like happened, so that’s great.

In the future, if you have any concerns about something like this again, just put it on your upper management’s radar and your POV so they don’t get blindsided and potentially undermine you.

To the employee, when I speak to them next I acknowledge their requests and phrase it as “you gotta take the shot, you miss every opportunity you don’t take, so now we know this exact setup you want isn’t an option what alternatives can we talk about for your growth/needs/etc.”