[KWH]

Encroachment is ALWAYS a dead ball foul and ALWAYS prevents the ball from ever becoming live.
It is not possible to enforce a Dead Ball BIB foul, since, technically, it did not occur.

Therefore, absent of a Personal Foul, enforce the encroachment and move on.

The Rules Book support you are looking for simply does not exist!
The Line Judge made an officiating error. Now you are suggesting penalizing a team due to an officials inability to understand a BASIC rule. Their would never be Rules Book support for such a suggestion.