I was wondering why he banned the whole university and not just these particular researchers. I think your quote is the answer to that. I'm not sure on what basis this exemption was granted.
Here's what the NIH says about it:
Definition of Human Subjects Research
https://grants.nih.gov/policy/humansubjects/research.htm
Decision Tool: Am I Doing Human Subjects Research?
https://grants.nih.gov/policy/humansubjects/hs-decision.htm
And even if they did find some way to justify it under their own rules, some of the research subjects clearly disagree.