Thanks for sharing. I always enjoy reading author-publisher process articles as they get to the true behind the scenes story. I can relate to most things mentioned, and the terms seem identical to what I had when writing Modern Fortran with Manning. I also started with the intent to write for experts, but the publisher pushed for targeting beginners. The author can concede or (usually) give up the project.
One important aspect to this is that a typical first-book technical author knows well the subject matter, and sometimes knows how to write too (but usually not, as was my case), but does not know how to edit, typeset, publish, market, and sell well. That's what the publisher knows best. And of course, they want sales, and they understand that overall beginner books sell better than advanced/expert level books.
I encourage the author to continue writing and self-publish, and at a later time a publisher come to package and market a mostly finished product.