OK, I found something in Rule 7, and when I returned to post, I see that you have already cited the rule, so I will cut and highlight what's relevant and we can discuss.
Quote:
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Originally Posted by Nevadaref
Rule 7 Out of Bounds and the Throw-in
SECTION 1 OUT-OF-BOUNDS — PLAYER, BALL
ART. 1 . . . A player is out of bounds when he/she touches the floor, or any object other than a player, on or outside a boundary. For location of a player in the air, see 4-35.
ART. 2 . . . The ball is out of bounds when it touches or is touched by:
a. A player who is out of bounds.
b. Any other person, the floor, or any object on or outside a boundary.
c. The supports or back of the backboard.
d. The ceiling, overhead equipment or supports.
NOTE: When the rectangular backboard is used, the ball is out of bounds if it passes over the backboard.
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SO, based on the highlighted sections above, it would seem to me that the ball is still out of bounds because it is still being touched by a player who is out of bounds.