I'm not familiar with FMD so I had to look it up. Functional Mental Disability looks to be a term that only KY uses which is why I wasn't familiar with it. If he's average except for math & writing, he doesn't have a intellectual disability but it seems like that's how his placement treats him.
My feeling is that if he's got processing issues, you add special instruction to help him learn to process better. I'm curious how well he did when he had a 1:1 helping him in K-5. Was the 1:1 strictly a scribe or did they do things for him where he appeared to be more capable? In reading between the lines, I see you questioning the accuracy (or maybe the interpretation) of the eval that was done before MS that moved him into his current self-contained classroom. I also see concern about the competency of the teacher/appropriateness of the class given how your son reacted to going to school with them when the year started. You have a lot in your post.
I'm not too sure about the rules in KY. I'm in PA & the alt assessment can only be given to the lowest 1% of students in a district. My district has 12,000 students so only 120 can take the alt assessment. Not sure if your school has limits like this - might be worth poking around to see how your school compares to other in your area with the numbers taking the alt assessment. This should be on a website with the tests scores. Here, the alt assessment a simpler test of the same state standards that all students get tested on in grades 3-8 and once in HS (as mandated under ESSA). IMO, these tests are meaningless with some disabled students. If your child had READING issues, I can see them not doing well on these tests as it's a lot of reading comprehension that's needed. You said his only low areas were math and writing. If he's grade level with reading, it doesn't make sense to put him in a self-contained remedial class - it follows he should be with same-age classmates so he's in the Least Restrictive Environment. I've seen students have behaviors when the instruction isn't at a good level for them. Gifted kids will be bored and act out while those that can't keep up will get frustrated and act out. My feeling is he's bored because he's average except for a math & writing disability which is what his eval showed. Rather than remediate, the school wrote him off by putting him into this class. He's not getting appropriate instruction.
So, what can you do? You want to match the child the eval describes to the services they need. He needs access to grade level for all but math & writing since these are the only areas of need. He needs remedial instruction in math & writing to see about him catching up. He might need a dysgraphia assessment given his writing issues. He might need assistive technology in math & writing (talk to text) until he's closer to where classmates are or it might be for the long term.
When you looked at what he was being taught, it seemed to be well below what he's capable of doing. He's pulled from the grade level classes he was attending so they can give him work below his classmates...and it seems like things would be similar if he went to a different school.
I remember being in a meeting with my director of pupil services. What she said was that the school needed to meet the needs of the students and if the classes they had didn't do this, they needed to create a class that did. If I had to guess, the other kids in your son's classes might be similar to your child. I think you need a lawyer to get your child an IEP that is appropriate for him. My suggestion is to reach out to the Disability Rights group in your state or your local Arc. Tell them what's going on and get them to help you to work with (fight ?) the school for an education that's appropriate for your son. Bring in other families and make it a class action suit - there is strength in numbers.