I've been assuming that the receptacle would be removed and a box installed.
What are the other parts of the code concerning re-identifying conductors other than 250.119?
The only other requirements is for the grounded conductor (neutral) which is 200.6 which has the same allowance for identifying another conductor as a neutral, but since he is changing a neutral to a grounding conductor then it doesn't apply in this case.
While it looks like a white can be re-identified as a grounding or ungrounded conductor, a green conductor can not be:
250.119 Identification of Equipment Grounding Conductors.
Unless required elsewhere in this Code, equipment
grounding conductors shall be permitted to be bare,
covered, or insulated. Individually covered or insulated
equipment grounding conductors shall have a continuous
outer finish that is either green or green with one or more
yellow stripes except as permitted in this section. Conductors
with insulation or individual covering that is green,
green with one or more yellow stripes, or otherwise identified
as permitted by this section shall not be used for ungrounded
or grounded circuit conductors.
While I have always been allowed to use a re-identified white for a grounding conductor,I did have an inspector I had to get the state to over ride him as 200.7(C)(1) does seems to say it can be re-identified as an ungrounded conductor but not a grounding conductor:
(C) Circuits of 50 Volts or More. The use of insulation
that is white or gray or that has three continuous white
stripes for other than a grounded conductor for circuits
of 50 volts or more shall be permitted only as in (1)
through (3).
(1) If part of a cable assembly and where the insulation is
permanently re-identified to indicate its use as an ungrounded
conductor, by painting or other effective
means at its termination, and at each location where the conductor is visible and accessible. Identification shall
encircle the insulation and shall be a color other than
white, gray, or green.
Why does it list White and Gray along with Green unless this is only addressing if it is used as an ungrounded conductor which would make sense as these colors are not allowed to be used for ungrounded conductors, and our state AHJ agreed with this interpretation and there is no where else that disallows a white conductor to be re-identified as a ungrounded or grounding conductor like it does for a green conductor in 250.119.