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Forcing people out of the military for a policy that wasn't around when they joined gives the service member some leeway. There's usually a period of voluntary separation where they can opt in to receive a severance pay and streamline the process. If the service member doesn't opt for voluntary separation, they are involuntarily separated. This involves a little more paperwork, a longer process, and half the severance pay of a voluntary separation. In both cases it's an honorable discharge (unless there's something else criminal at play) and they keep all benefits and entitlements.
I'm more familiar with Navy regulations, but here's an example from the DEI rollback from March (TW for the shitty title of the message).
Trigger warning
Initial Direction on Prioritizing Military Excellence and ReadinessParagraph 5 stipulates the terms of voluntary separation. More specifically:
If you have friends, family, or acquaintance who are US military members, please use this information and opportunity to educate, agitate, and organize. Some of these people are about to lose their stability and routine, and it's important to direct their frustration and blame at the racist policies of this administration, linking it to other intersectionalities, and building camaraderie.