He is right, it does have a derated neutral but it is larger than 1/0 so it can meet the requirements of 310.4. I don't see a problem except the cable is not a listed cable for use as a service cable. If it is listed as USE cable, you are set. We use URD cable all the time but it is not normally listed (I have seen some shipped in to us that has a USE/XHHW-2 marking and it is listed).