To me, the short answer is no also.

You mentioned that your client is a prop trader.  My presumption is that he has carried interest, other cap gains/losses, as well as ordinary business losses flowing through the K-1?  If that is the case and assuming your client doesn't have any other business income, the EBL being limited to $250k ($500k for MFJ) is exactly the intention of the new §461(l).  What is your basis for making an adjustment on F.461 and what do you intend to re-classify as gross income from trades or businesses?

One thing to note is that the Congress intended for wages to not be considered gross income from a trade or business for purposes of §461(l), similar to the tax treatment under other code sections such as §199A, but it was not written into §461 and a technical correction has yet to be made.

The limited information you have provided does not seem to imply that this involves §475(f) election.  If there is one in effect, gains and losses subject to §475(f) would then be MTM and treated as ordinary gain.  Capital loss limitation would then not apply on the net loss, SE tax would need to be paid on the net income (after deductions for business expenses presumably on Sch C), and such gains may then be considered business income (that could offset business expenses flowing through the K-1).