Two team members were released because the customer reduced the budget, yet the agile team still has the same or more work. How should the agile team leader handle this?

The correct answer is to communicate the team's new velocity to the customer. When team members are released, the team's capacity to deliver work (velocity) decreases. It's crucial to transparently communicate this change to the customer so they understand the impact on future deliveries and can adjust expectations or priorities accordingly. Adjusting the project budget is not directly within the agile team leader's control in this scenario, as the budget reduction caused the release. Updating a restriction log might be an internal step, but it doesn't address the external stakeholder (customer) impact. Explaining changed project requirements is incorrect because the requirements themselves haven't changed, only the team's capacity to meet them.