No, the files in your drive "look like" they are files, but they are actually just links. So him moving them to the local disk did not actually copy the files to local disk.

The real failure here is that you shouldn't be able to move the drive links out of the drive folder, since semantically that does not actually move the files.

(Filed a bug, but I'm not on the Drive team so I can't really take responsibility for this getting fixed. It does seem like a problem to me, but I don't know their infrastructure nor the limitations of shell extensions, so I can't really comment on whether a fix is feasible either.)