It sounds like the boss is making a judgment call.
Recently I projected OCONUS leave to an exotic location. My commander rejected it, even though there is a specific process (FCG, immunizations, APACS, etc) to do it, because of his own risk assessment and judgment.
I was able to change his mind, which turned out to be pointless since the hotel closed and the flight was cancelled lol.
The point is that commanders do have the authority to deny leave based on their judgment. The only way I could see them getting into trouble is if the denial is a pretextual excuse for some kind of unacceptable activity (discrimination, retaliation, etc).
What I'd do is one of the following things:
Give up
I'd frankly do this. We're still in the thick of a pandemic and COVID entry rules can change dramatically and without notice, causing you to lose out on hundreds or thousands of dollars, many of which may not be refundable
Ask the Wing CSS for such business rules/written direction
None likely exists, it was probably a verbal statement from the boss
Appeal to the Wing CC
This will probably get you smacked down unless you have a pre-existing, good relationship. The boss is going to have bigger things to worry about than making sure that someone in a squadron gets to take exotic leave, while mobilized, during a pandemic
There are battles worth fighting and I honestly don't think this is one of them. You'll be off orders soon enough and the pandemic will end, eventually. Just hang tight, don't rock the boat, and wait until the time is right. We Reservists often get leave denied when we're on orders as the understanding (rightly or wrongly) is that we are a surge capability to be leveraged when mission requirements demand it, so leave is a nice-to-have, not a gotta-have.
My $0.02