A user would like to make a document 'read-only' to everyone but the folder is set to inherit rights from parent.
The simplest way is for the entry owner to set the rights on the entry themselves (remove inheritance, remove existing permissions, and only add "read" permissions to "Everyone"). It is possible to accomplish something similarly using the Records Management feature, but this may not apply to your situation.
This is definitely the easiest way. I would add that removing inheritance is something that you should really only use sparingly. So it's ok if this is a one-off exception, but if you expect to want to do this in the future, it's worth taking a step back and re-evaluating how you have designed your security. In general the solution to security being too permissive is to not grant the unwanted rights in the first place.
We will consider why the user needs to limit access and see if we can find a better solution that fits within our security.