In general, I'd rather hear a report about an over-attentive DM, than an under-attentive one. The DM mentioned sounds inexperienced to me - and might have being having difficulty differentiating experience/comfort levels in his group, coupled with a little residual paranoia from role-play training on their DM course.
I wouldn't cast judgement until I heard the DM's perspective, however, purely from the account written, I'd have the following speculative points;
1) Reg Replacement - If a diver has regulator in hand, and seems in-control and calm, then the DM shouldn't physically intervene to replace the regulator into their mouth. If the DM did have concerns about the diver's air-source, then they should assume a problem and be ready to offer their own AAS for the diver to use. It's a bad call to push the diver's own regulator back into their mouth, because it may have been removed due to a problem with gas supply or it may have been taking on water etc. Over-zealous intervention in this manner can lead to diver discomfort/panic. In this situation, the DM seems to have made an assumption about the diver's competence - which possibly shows that the DM had failed to ascertain and understand the qualification, skill, comfort and competence of the divers under his supervision.
2) Physical Control of Diver - There are times when a supervising DM might need to physically control a diver, especially with regards to depth. To make the decision to physically manipulate the diver, rather than simply communicate/advise them, there has to be some immediate danger, coupled with a lack of timely response by the diver to communication. I've intervened to arrest a divers ascent and descent before - always of safety reasons and always because the diver concerned didn't react effectively to communication and/or seemed unable to take action for themselves. Typically in an uncontrolled descent, fast ascent or when a diver was exceeding maximum depth/time and heading into deco. The example given in this thread does not seem like one of those scenarios - and physical intervention seems to have been carried out in a non-critical situation that didn't demand urgency. In this situation, a slow, controlled and deliberate ascent was being conducted... as the diver is entitled to do. Coupled with this, the DM seemed to make an assumption and didn't confirm why the diver was ascending (there could have been a safety issue causing the ascent decision).