Spamtrap accounts don't reply to confirmation emails or click on confirmation links - ever. That's the whole point of them. Even if you're a malicious troll who got a list of Hotmail trap accounts from somewhere, how do you get control over them to confirm signup?
The malicious troll doesn't need to confirm signup - only to request it, at which point the list server will send an email to the spamtrap, and boom, your reputation takes a hit. All while you're conforming 100% to best practice.
Look. It's possible that this guy has done everything totally by the book and somehow has just got unlucky that his behaviour happens to closely match that of actual spammers. Or it's possible that we don't have the full story. Having been on the other side of such stories and investigated cases like these, I think "sender is not following standard mail etiquette" is far more likely than some enormous conspiracy theory against him. After all, plenty of bulk mail senders do just fine.
I see what you're saying, but he's not actually having his IP blocked in this case. The blocking is taking place based on the content of the message, specifically whether it mentions certain domains set up as relays. The interesting question (from his point of view and ours) is exactly how those domains become flagged as "spammy". For instance, I'd be interested to know (as others have asked) whether the relays allow traffic on port 25, and whether this is a factor.