Can someone explain this Freeman Dyson quote about gravity and thermodynamics?

Smolin refers to gravitationally-bound dynamical systems as "antithermodynamic" for this reason: when you add kinetic energy to, for example, an object in orbit around a larger object, it moves out to a larger orbit and slows down. If you subtract kinetic energy from it instead, its orbit shrinks and it speeds up.

There's no contradiction. Heat still leaves the hot star, but that raises its temperature because it has a negative heat capacity. See here.