Is it permissible to dedicate the recitation of the Qur’an or any other act of worship to a living person who disobeys Allah? Will that benefit him? And what is the optimal way to deal with him?

As for gifting the reward of righteous deeds to the living, there is a difference of opinion regarding it. As for this person, remind him of Allah Almighty, warn him of the consequences of sins, and explain to him their harm in this world and the hereafter. Warn him of death, that his appointed time may come at any moment, and that he is in great danger if death overtakes him while he persists in these sins. Invite him to Allah with wisdom and good admonition, and by whatever means you can, striving diligently in supplicating for him.