Steam may not transfer game ownership, but can your friend not create their own Steam account and purchase their own copy of FFXIV from Steam?
It depends on how steam authentication will work, if the steam and ff14 account needs to be correctly linked (and it'll have to check if the account you try to log into is a steam account, so this is not an odd thing to expect), he'd be out of luck and has to either start from scratch, or start playing on PS4 instead.
The friend doesn't have a Steam account, but has a working FFXIV account that is linked to the Steam version of the game. So the friend should just need to fill in the missing half, by creating a Steam account and purchasing FFXIV with that Steam account, and then using the already existing FFXIV account with that version of the game.
Except if Steam checks the SE licence keys on the account figures out they don't match and prevents access. In fact depending on how many checks they do and how eager they are to enforce the new rules both the OP and their friend might end up being served a ban from Steam. The OP for giving a key away they owned, and the friend for "buying" it (even if it was a gift it wasn't done via the correct system). Now a Steam ban isn't going to affect the OP at all, since their PC licence means they can access FFXIV from the usual launcher - but the OP won't be able to track their game hours in Steam anymore, they may not even be able to use the overlay since I've no idea how or if it will be possible to add FFXIV as a non-Steam game. (The Steam overlay doesn't always work with games added to the Steam library as non-Steam games.) And obviously ban or no, if Steam does a licence check, the friend will lose access to FFXIV permanently.
Or square enix could do the ethical thing and let players opt out of the steam account version and convert to a regular version. The steam version sucks
I still don't understand. The license is for installing and running the FFXIV software. There should be no issue there with Steam if the friend makes a new FFXIV purchase with their own Steam account. Once the software is running, you should be able to login with any FFXIV account with a valid Windows Steam license.
Ok how do you think the normal launcher is going to check that I am a Steam user? The only way that SE could prevent me from logging in via the normal launcher downloaded and installed from SE's own website is by checking my SE account for my licence keys. Now it could be a simple PC/Steam check OR it could be a check to ensure that my Steam account keys match my SE account keys. The way ESO's worked was the latter. I knew a few people caught out by this because in ESO you could mix and match PC/Steam keys. If it is checking for an exact match between Steam keys and SE keys the friend will lose access to their account because the keys will not match.
Only if you login to your own Steam account on their PC, you cannot log into your ESO account from someone else's Steam account. Let me try again.
The OP's friend has the OP's Steam key-
Steam Key 1 (Old) ABC
This key is not applied to the OP's friend's steam account for obvious reasons.
The OP's friend buys a new copy of FFXIV on Steam-
Steam Key 2 (New) XYZ
But what is on the Friend's SE account is the old key-
SE Key: ABC
Steam checks the Steam key XYZ, against the SE account key, ABC and finds they don't match. The OP's friend cannot access FFXIV.
There is no flag in the SE account system to determine a Steam account from a PC account. It has to check the keys themselves.