Nothing explicitly forbids this, but the GM should either officially endorse it or ban it.
The system, at least my understanding of it, gives the GM basic mechanics to build his own game. But it is his job to ensure that the characters make sense and are fairly built. The rules about what some attributes can do are vague at best. Especially with attributes such as Alternate Form, Dynamic Power or Power Flux. If you want to see exploitable powers, those last two are so bad that the book advise GM against letting inexperienced players having them.
So while it’s not strictly forbidden, I would talk to the GM to see if he is fine with this and to what extent he intends on restrcting those kind of loopholes.
I’ll describe a few way how I have either heard of the Alternate Form being ruled or how I would rule it in my games.
Sticking to the rule, their alternate form might just not work.
Speaking in a strict mechanical, the GM may very well rule that because they have refunded the Alternate Form, they can’t be in this form anymore. So the character reverts back to his original form and the attributes just falls apart. This is the way I would rule this if I wanted to stick as close to the book as possible.
The buy-in price may be changed with restrictions
If your co-players think that a lone extra point is too little, they would not be alone in this line of thought. The attributes appears to have been made under the assumption that they price would be lowered by making the transformation cost something. All those ideas assume that the attribute was meant to not be refundable.
Restrictions like casting time (Activation), limitation on turning it off (Emotional Component, Assisted, Irreversible) or some form of cost (Consumable or Deplete) all make the attribute both cheaper and more interesting to play.
The new form may also have new defects. Wanted and Marked are two obvious ones. turning into a monstrous or obviously-non-human creature, for example, should definitively come with those kind of defects while in this form.
Just officially change the new form’s point budget
If the players (or GM) think that the attribute is not good enough in this state, Here’s a houserule I have seen many time. Just change the 10pts budgets. This is especially useful if the GM want to keep the game simple and not deal with multiple restrictions.