How many pencils can I steal before being fired? How much reputational damage can I cause while remaining employed? You're clearly advocating for guaranteed employment if you say one should never be fired for such things.

Your attitude reminds me of Office Space and how someone can rationalize theft.

It's a fraction of a penny, they won't miss it

A thief should certainly be punished. The severity should be based on impact of the crime among other factors, which go far beyond money value of the stolen item. Social degradation and loss of a high trust society can cause far more economic damage even if it's just a cup of coffee. Cutting in line hurts efficiency despite having no nominal economic value.

For Japanese schools, the reputational damage could cause them to close. If that's the case, why not fire him? I'm not the business, so I can't decide on their behalf, I don't know their business situation. Should a McDonald's fire an employee for flicking a booger into a burger?

Personally, I don't think he should lose his retirement pay, but I'm not aware of Japanese social and business dynamics nor am I arrogant enough to say whether that was the right choice for them.

I'll say it again: Should a McDonald's fire an employee for flicking a booger into a burger? Maybe in India, they could get away with it. Maybe in America, they would have to fire that employee. Different consequences for different societies.