Yup. He got mad and quit after they mocked scientology, so they poorly spliced together a bunch of his old lines to make an episode where he joins a pedo cult and dies a very undignified death.
While I liked the character of Chef, this was unquestionably the right call. Caving to Hayes would've been equivalent to removing one of the balls from the tank that the manatees use to write Family Guy.
No, Hayes didn't do any of that. He was dealing with the aftermath of a stroke and the cultists around him made the decision to quit south park. Matt and trey found out later. That's why, after the initial episode roasting chef and even reintroducing him as Darth chef, we haven't seen him ever again.
In an interview with The Hollywood Reporter, Isaac Hayes III suggested that the Church of Scientology made his soul legend father quit South Park—despite the narrative that the singer and actor quit in protest. “Isaac Hayes did not quit South Park; someone quit South Park for him,” the son explained. “What happened was that in January 2006 my dad had a stroke and lost the ability to speak. He really didn’t have that much comprehension, and he had to relearn to play the piano and a lot of different things. He was in no position to continue.