How to deal with the tenure case of a colleague who has avoided teaching the classes they were hired to teach?
Based on the information you've provided (and certainly the part of it that is not based on unsubstantiated rumors, which I think it would be quite problematic to take into account), I do not see any cause for concern of a sort that would cast a serious shadow over your colleague's tenure case.

The reason is that individual faculty members do not decide what they teach, but instead the assignment is made by the department (the chair or a dedicated committee) based on its needs, and it is the duty of faculty to teach what they are assigned. It is completely fine if your colleague requested not to teach courses in area X - we all have preferences in such things; it would only not be fine if he were to be assigned such a course and refuse to teach it, and that does not seem to be what happened. If the department can meet its future teaching needs without this person ever teaching a course in area X, why would you or anyone else find fault with that? To summarize, your interpretation that the faculty member "flouted" the teaching requirements of the position seems quite questionable to me, at least in the absence of additional details you haven't provided.

I should add that I have seen cases of faculty members who actively resisted teaching courses they had been assigned. Such conflicts usually involve people with very difficult personalities, and unless the department chair is a total pushover, they will likely escalate quite rapidly to a higher level involving the dean and/or disciplinary action being threatened or pursued. And when this happens, you can be pretty sure that the miscreant is already tenured...