There is a logic to your buddies sequence of painting. Prepping everything first minimizes the risk of damaging any finished area later and then masking off the interiaor and painting the exterior is also sensible. The interior is hard to mask and if it were painted first and then poorly masked you would have overspray to fix, if you paint the exterior first it is much easier to mask off with less chance of overspray. Sparaying door jambs and inside of trunk before the exterior is logical.
Since he uses rustoleum for the engine compartment i can see why he buffs the exterior first. The buffing process is messy and the rustoleum paint is soft and the buffing compound can stain it, so do the buffing first, mask off the exterior and shoot the rustoleum last. The sequence sounds like it was learned from previous mistakes and I see no problem with it.
As to the rustoleum, I would not use it, I have used epoxy primer as well as a 2k flat black from kirker, both products came out looking the same and I think the kirker is a little easier to maintain. If you already have a black epoxy then I would just use that.