Any idea what the issue might be? The b'day is set correctly, he has ticked the option to show that it's his birthday, but for some reason it isn't showing...

Ok, think I nailed the bug. Seems like the birthday icon shows up according to server time, disregarding the server time adjustment in the CP. So if you host your server in a different location than your core user group, the "birthday hours" will depend on where the server is located...