I've slept on it and made my decision. I'm gonna allow him to use his sai for all attacks if he wishes. Why? Because ultimately it doesn't change anything. If he has no weapon and punches something 3 times a round, it will do 1d6+4 damage per attack. If he hit's something 3 times with his sai, it's going to do 1d6+4 damage per attack. The only difference I can see is the Sai can do bludgeoning OR piercing damage so I'm going to rule that he can choose the damage type for his 2 attacks he gets with his attack action, but the bonus attack(s) must be bludgeoning. He can also choose to throw a sai(20/60) with his main attacks, but not with the bonus action attack(s).
Now the feat is still up in the air. I like the +1 to AC when wielding a pair of sai, and I'm considering on just giving him the Parry and Disarming Strike maneuvers, but traditionally, you wouldn't disarm an opponent by attacking with the sai, you would disarm them by parrying their attack against you. So maybe they can have a superiority die, and when using the parry maneuver, if they manage to reduce the damage to zero, THEN the enemy makes a Str saving throw or drops his weapon? Maybe make him use a ki point or two? I kinda like the idea of tying it to the ki so he can't spam it.