So from your description, it appears that he can spell accurately in isolation, either when producing individual words in a spelling-focused task, or when all he has to do is recognize the correct spelling. However, he does not effectively retrieve correct spelling patterns from memory when engaged in a more cognitively-demanding task.
Pretty much what I would expect from a child who has not attained automaticity in one of the precursor skills to fluent written expression. My dysgraphic-esque child is very similar: spells fine when that's the whole task, and can distinguish between correct and incorrect spelling provided, but reverts to phonetic equivalents when attempting to think and write at the same time.
Your DS1 has no scores below average, which may or may not make it a tougher sell to get accommodations or interventions through an IEP or 504, but, in the real world (and most likely college), should be using many of the same decoding/encoding accommodations I would suggest for his twin, including, obviously, word prediction software and speech-to-text (since these have proven effective for him already).
