Ugh...In the moder world of TCAS, TAWS, etc...This is not likely to happen. VFR airplanes fly around all the time without getting a clearance from ATC to climb, descend, turn, land, takeoff...
I agree with your thought process.. Pilot should've just deviated on his own, as this is specifically allowed during emergencies. Your VFR argument is pretty week, however.. Because VFR doesn't exist at FL250.