"Why would it not be a commission on the sale?"

He would only get a commission not reportable on the W2 if the party paying is Not his employer, or if the commission is because of some other business he runs, such as he has a Side Gig as a real estate agent and he facilitated the property sale.

"Or profit sharing?"

Nearly anything related to his employer would be subject to employment taxes and W2 reporting. About the only exclusion would be Safety Award. Tangible goods are not necessarily taxable, but money is taxable.

If the new owner still is not his employer, and they paid all the ex-employees, that would be an example of 1099-Misc. Under most cases, this sale will result in all employees being fired (unless the sale included the entity) and needing to be formally hired by the new entity.

These are just guidelines, of course. Specifics matter, and that is why you see so many requests for more details.

You called it, right here:

"Current year, received NEC" <== NEC is for Services, so wrong form from your Employer

"Not sure sending party correctly identified form to select" <== Apparently, it is the wrong form