Why would gravity follow an inverse square law in this model? Wouldn't you expect there to be a hard cutoff as you moved away from a busy region, instead of a gradual decrease?
His proposal does have some unresolved issues. E.g. distance is quantized but the interactions of those quantized variables produce continuous things that affect other things that are quantized. We don't have enough energy to see the limit yet, but it is possible.
Also by defining the inverse square law you can maintain a cohesive interaction model between different objects and regions. Their sphere of influence (which can be described by gravity waves) will now just be superimposed on top of each other without extra work.
Or even crazier, maybe it's a combination of both, maybe there is a hard cutoff after all once you pass the event horizon.