Commanding the Wolf to attack still requires an action
Awaken does not free the beast companion from its bond to its Ranger. The Ranger's Companion ability is not contradicted by awaken in any way.
Realize that the reason you have to use an "action" -- a mechanical implement, not a narrative one -- is for balance and the sake of the action economy. A player with two characters has a strong potential to be "broken" mechanically, compared to the other classes.
Also realize that the reason why a Ranger's Companion doesn't get its own turn in initiative is not due to its low Intelligence score. Anyone can get a pet dog that fights with them in battle, and that pet dog will have its own initiative. It's not the Intelligence score that matters here, as there is no minimum score requirement to have your own turn.
Your companion does not gain what your players want as long as you have it remain your companion. You can free it (and risk it leaving), and bind with another animal. Then the ex-companion then becomes unburdened of the need for your actions to direct it in combat.
I would further like to emphasize this point:
They argued that the wolf is now basically an NPC and can think for himself. Therefore it can attack on its own.
If the Wolf was an NPC, then you, the DM, are now the Wolf's controller. This means the Wolf does not do what the player commands, but what you, the DM, says. It should be voiced by the DM because an NPC means "Non-Player Character."
This means, the Wolf will not necessarily obey all of its players orders -- except that it is still a Companion, so it must, since it is still bound by all the rules of a Companion (one of them being: PHB 93 "The beast obeys your commands as best as it can" and another: "You can use your action to verbally command it to take the Attack, Dash, Disengage, Dodge, or Help action.").