The scenario is not ficticious. It's taken straight from my first job, but I had to leave out specific details. The application being developed had something to do with DRM, so that might explain the weird requirements.

The lesson is that sometimes business will require you to force users to update their version, and/or enable specific features for specific subsets of users. So you should have such a mechanism in place before it is required, otherwise you will end up doing hacky things like breaking the server to do what needs to be done.

Systems such as these are actually fairly common in enterprise, but since it was my first job, I had not planned ahead for this because I had no idea.