I've taught kids arriving or not arriving at puberty (grades 5-7) for several years. I can tell you that there are always a few kids who are physically behind the other kids, who hit puberty a couple of years later than their same age peers. That can be a big deal to the kid and his parents for a couple of months, maybe. At that age, any number of things can be an intense big deal at the time. In terms of long-term effects on ability to maintain relationships and hold down a job, not that big a deal.
Retaining him for a grade where he has already performed well academically would be the worst kind of punishment. If you want him to be convinced early on that there is no meaningful connection between his effort and achievement and his future, making him repeat second grade would be an effective way to do that.
In the interest of full disclosure, I was in mixed-age classes at a rural elementary school as a PG child. There was some discussion of skipping me from second grade to third, but because I could not catch a ball, I was not skipped. I took ballet and weight-training for PE credit in college as part of my lifelong plan to avoid projectiles, and I grew up to be a Profound Underachiever. So I've always believed the team made the wrong call when they decided not to skip me.
