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In order to free up the license, all one needs to do is go to Setup > License > Tech Licensing, locate the desired tech in the list, and un-check the box to the left of their name. From there, the instructions SolarWinds gave you are good and correct.
If you really want, you can then go to Setup > Techs and delete the tech's account, but be warned that will remove their name from the "assigned tech" field in any previous tickets that were assigned to them. I'd also recommend doing an advanced search (Tickets > Search Tickets > Advanced Search) to ensure they don't have any active tickets assigned to them.
Awesome...thank you so much for clarifying!