How many other projects is the BL involved with? If your answer is zero, you are killing his baby.
Nope. Band leader is killing his own baby by insisting on rehearsals that others already told him they can't do. And threatening them. Seasoned professional musicians don't need to rehearse 4 times a month for a gig.
I in fact finally felt like I got some justice, or "I told you so" affirmations regarding this last night. I played for about 6 months a while back with a dude who talked a big game, made lots of promises, and insisted that we rehearse every week. After more rehearsals than I care to admit to, and no gigs, I quit and immediately found another band playing the same exact covers yet doing the opposite. Gigging instead of rehearsing. It's now a few years later and last night we used one of the newer guys from that first band as a sub in my new band. His experience with the BL was the same as mine, and I wasn't the one who brought it up. He too, quit because of the rehearsal to gig ratio, and doesn't think very highly of the band leader. I should mention that that other band fell apart. The non rehearsing band that I'm playing in now with the other guy who quit 1st band, is still going strong, and playing some well known venues in NYC while getting paid more than most bands doing the same material.
I just put together a Deep Purple/Rainbow tribute. We got together for rehearsal 2 times. 5 songs first time, 5 second, and after the next we'll be booking shows and probably never rehearse again unless we go a long stretch (which will probably be the case given the type of band it is

), without a gig. Our first rehearsal could have been a short gig. Everyone was completely prepared, and the band was tighter than many bands I've played with for years. And the material was a lot more challenging than what those other bands were playing. Point being, all the musicians were competent, committed, and did their homework well.
I'm not saying there's anything wrong with rehearsing every week. I think that's essential for some bands, and I'd surely not be in the place I am now to NOT have to rehearse if I didn't have the amount of experience I do have, rehearsing. My point, which I'm not certain I'm making clear because I'm writing quickly.... is that I think it's important that the entire band is on the same page. And if anyone is being a douche here, it's the BL. If someone threatened me with a sub like that, I'd say the same thing the OP said, and even if I had a lot invested, I'd bite the bullet and find another band. A band where everyone understood their job, and was on the same page as me.
Time goes by quickly. I've wasted a lot of that time playing with people I know in retrospect I shouldn't have wasted my time with. But I guess I needed to do that to get to the point where I'm now aware of it. There are lots of other bands out there. I've found that the old saying, "when one door closes another opens," is completely true so long as we believe it, and have our eyes open for that other door.
If looking for advice, I'd say you did the right thing. Just don't beat yourself up over it, and stick to your word. Threatening you with a sub is completely uncool. That's enough motivation for me to walk without even giving the BL any choices to make.