Can only one roommate be left responsible for money owed if the other roommate fails to show up in court?

Your citation of the preclusion of any judgment for a landlord who has not registered with the clerk of the court under NJSA 46:8-26 is correct, and furthermore, 46:8-29 requires the landlord to provide all new tenants with a copy of said registration. The answer to your question seems simple. As the judge has made an offer to the attorneys in the case that they do not have to accept, one or preferably both of them should file a motion stipulating agreement with the offer provided the court's order notes that the landlord is in non-compliance with the law, and therefore the plaintiff is entitled to KEEP the returned money as abatement.

Your friend should make sure it is spelled out, or it is a trick. Otherwise he should hold his ground and if need be appeal the court's decision for obvious procedural error and file a complaint with the judicial review board.

What you describe isn't really that unusual.

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