The stock ECU will pull timing if the knock sensor is triggered. You will have no issues running the stock ECU with higher compression. Yes, you will need to run higher octane.
That's not the right way to do it.
The stock ECU will pull "If" their is knock. Their are many factors involved that are related to knock. Increasing compression is one of them. If he does nothing more than add compression, it's likely he will not see knock. The stock Protege ECU timing is already low. Now if he does have some knock, then the ecu will pull timing and "learn".
You are very misinformed. I've tuned the s*** out of the FS, and researched to death how toe stock ECU works. Relying on the knock sensor as your sole means of avoiding ping is incorrect, stupid, and a "hack" way out of proper tuning.