12.3.2.1.2 is for NO SOLID SHELVES. You have shelf storage, which if I understand correctly is a solid shelf. As such, it doesn't apply.
I don't know who the consultant is that came up with this, but I still stand by my original assumption that they are wrong, or need to provide full scale fire testing. Otherwise, make the top shelf mesh and change to EC-25 sprinklers.
People make mistakes. Unfortunately, it is not uncommon. I do it all of the time
Whoever put forth this criteria on shelf storage to 16.5 feet simply selected the wrong criteria and the wrong head. You said they went with the 0.49 density. That comes straight from the section I posted above. I would just put it back on the "engineer of record" to show how it is compliant. If you need rationale, quote him the definitions of shelf and solid shelves per 13. Then show him the section I quoted above.
It means they will have to redesign the system, but it happens some times. It is not fun, but we have all gone through it.
So, I can't really say that a shelf fire will develop differently and/or be more demanding. But, I can say that NFPA 13 has distinctly different criteria for shelf vs. rack storage. It is pretty clearly spelled out what they need to do for shelf storage in a retail setting. They just need to follow 12.7.2.6. Nothing more or less without full scale fire testing.
I think the consultant may be digging their heels in trying to save face for a simple mistake. With all of the changes in fire sprinkler technology, it is very easy to make a mistake like this. Thankfully, you caught it in the early stages and it can be corrected. It is better to be caught now, instead of having 200k sq ft of piping up in the air.
Good luck!
Travis