I know I sound defensive of my son. There's a little more background here that I don't want to get into. Also, this adult is not actually the head of the activity but an assisting person, not that it really matters... Regardless of that--personally, I don't consider a little backtalk a reason to threaten to throw a kid out of a paid recreational activity, so that rubs me the wrong way. I would reserve that kind of discussion for serious repeated rule violation, violence towards other kids, etc.
But yeah, he is talking back, though he also stops the behavior. He is not pushing buttons (on purpose)--he doesn't know how to, except maybe with his sister. He's a pretty innocent dude. However, the instructor may THINK he is doing this. Which I agree, is a big problem. And we have talked to (ahem, yelled at) him about how he MUST be much more respectful and respond more quickly and appropriately. But I think what it is is, the adult is in a place where he seems to misinterpret DS and/or react more quickly to him. I've seen this before with kids and adults. You get in a groove where you see that kid's activity first and react first.
I also feel like this thread makes DS sound socially not with it, but the weird thing is, he is with it, generally....he's way faster to "get" what to do when we as parents are mad or irritated than his sister. He is quick to apologize at home and is the family peacemaker. The whole thing is kind of odd, really...