It's true that it's an honorific, but I think it has a little more teeth than you think. At the institutions I've worked at, it comes with a few perks (like faculty-level library privileges), but it also includes the ability to serve on MA/PhD committees -- which is to say, you can be part of the group of people who certify the completion of an academic degree, which is not a privilege normally extended to retired professors. I've seen it granted when someone is switching institutions, but would like to remain the major advisor for a PhD candidate.
But whatever the case, the person is absolutely "still associated with the university;" that is part of the reason they're awarded. It's an award, certainly, but it's also a way for an academic to keep their credentials and for a university to keep their association with a (sometimes famous) academic.
But yes: It can be revoked at any time. I would be surprised if this one wasn't.