@boomerang,
I think that is your answer.
You say you don't want to create problems between your two families because of the friendship between the boys.
Which would have less of an impact on that family friendship, telling the coach why you are removing Mo from the team, or just removing Mo as soon as he's accepted on another team?
Also, if Mo is playing on another team, will this coach still have opportunities at games to continue with the snarky comments to Mo?