Yes, he should be able to work, since he had a valid work permit before applying for the OWP. And since the OWP is an independent one (there's no study permit involved anymore) there's no limit to the hours.
Hmm... paper is slow so it might work? I'm not sure.
Since this is for someone out of status, as per
https://www.canadavisa.com/canada-i...for-spousal-application.874742/#post-11106842 you can only apply for the work permit once AIP is reached - AOR is not enough. Since you haven't reached AIP yet you can't apply for it - at least online.
If you did paper, it might be the case that by the time they get to it, AIP was already passed, and then they start work on it.. but I am not sure, it's possible they go by the date the paper app was mailed or delivered to them instead - so if they check and see that the date was from before AIP being reached they might reject it. Even in the best case there's some risk here because they could get to it before AIP is reached, resulting in a rejection. I think it's best to wait for AIP and then try the online app again at that time.