My interpretation is that, in advance, a TD must offer all divisions (unless he announces a restriction), but once registration closes, he can close any divisions with less than 4 players. Otherwise, I'm not sure what the "less than 4" provisions applies to. He can't know in advance, and for many events he can't know until 15 minutes before the players' meeting.
That's what the TD can do. Not necessarily what he should do.
Our policy here is, if we end up with a division with 1 or 2 players, to meet with them and give them the option of moving. Sometimes, to lean on them a bit. But if someone paid the money and wants to play solo---why, I can't fathom---fine.
In practice, it often doesn't even get that far, as players in low-populated divisions will come to us and request a change. Sometimes an entire division evaporates. The touchy part is when there is a 4-person division, and 2 people request a change.
I agree that a TD shouldn't move players without consulting with them. If he's not going to provide that division, he ought to offer them the option of withdrawal, or transfer to any other division for which they qualify.