[chapmaja]

Here is the ruling from the NCAA rulebook. The decision to penalize from the previous spot was correct, IF you rule an IW on the play. I stand with other individuals who have stated that there was an immediate act of recovery of the loose ball by VT, therefore the ball should have been given to VT at the point of the recovery minus the 10 yards for the holding penalty during the kick.

Live Ball Becomes Dead—ARTICLE 2
Approved Ruling 4-1-2
I. Fourth and 16 at the 50-yard line, Team A kicks. B1 clips on Team
B’s 40-yard line, and B2 muffs the kick on the 25-yard line. While
the ball is loose, an inadvertent whistle is sounded. RULING: If
Team A accepts the penalty, penalize Team B from the 50-yard line.
Team A’s ball, first and 10 on the 35-yard line. If Team A declines
the penalty, repeat the down.

For reference I have included some additional rules from the book.

Loose ball ruled dead, or live ball ruled dead in possession of a ball
carrier when the clear recovery of a loose ball occurs in the immediate
continuing action.
1. If the ball is ruled dead and the replay official does not have
indisputable video evidence as to which team recovers, the deadball
ruling stands.
2. If the replay official rules that the ball was not dead, it belongs to
the recovering team at the spot of the recovery and any advance is
nullified.