Those holograms are tens of thousands of years old. They aren't part of the present day Jedi Order. And the padawan that was told to lift the boulder is not "expelled" but he is judged as being unqualified to be a Jedi Knight. The point the Ithorian Master was making was that just because you feel sorry for him doesn't make him more qualified. You can't be made a Jedi out of pity. In many other cases the Masters of the Jedi Order will say that compassion and patience are what make you an exceptionally good Jedi.
This seems to me like a fairly deliberate mis-reading of what's going on in those missions. The NPCs tell you flatly that compassion is problematic for the jedi because it impairs their judgment.
Also in the setting being depicted in the game the republic is supposed to be seen as being in a corrupt/crumbling-under-its-own-weight state, and that extends to the jedi order as much as anything; to some extent we're meant to chafe at the staid, formulaic expression of the code as expressed ingame.
With that said, any moral code which forbids love (romantic or platonic) should probably not be used as a guide for human behavior.