Second, If, as you say, the app isn't the end goal, then don't release it and this issue doesn't even come up.
Third, you said "Wasting time fitting society's arbitrary moral standard is time not spent becoming a better gamedev."
As a parent, that is exactly why I would encourage him to create his own characters. It's not at all an arbitrary moral standard. Is theft an arbitrary moral standard? Plagiarism? If you don't have permission to use the characters, don't use them. These games are available on the official MS site right next to the official ones. Why go down the path of having to potentially have your account suspended, or whatever the punishment is if MS decides your apps are infringing.
Finally, What do you tell the kid the first time they have a successful project and someone rips it off? Don't get upset, you did it when you started, so it's ok? It doesn't matter that he's just getting his start, stealing these characters is just like stealing the source code an releasing it as your own. Are we condoning that as well? In my opinion, it's just as important to learn integrity as it is to build the app.
There are enough issues with writing your own games, you have just made it that much harder.
Of course there are also lots of free assets out there for use, but designers are more hesitant than developers to give stuff out for free.