I'm a former captain in the U.S. Marine Corps, combat vet, and there is no universe in which I'm entitled to a salute from active duty U.S. troops. Unless it's my own funeral.
So why would a former officer in the British military be entitled to one??
People do "salute" others casually as an acknowledgment of something that they did or said, and it has nothing to do with military protocol.
Thank you for serving. I get your point. He wasn't US military and maybe didn't know the rules or conventions.