Player fouled out...

[Nevadaref]

You are correct.
2-11-11 Note 2
The procedure if a player who has committed his/her fifth foul continues to play because the scorer has failed to notify the official is as follows: As soon as the scorer discovers the irregularity, the game horn should be sounded after, or as soon as, the ball is in control of the offending team or is dead. The disqualified player must be removed immediately. Any points which may have been scored while such player was illegally in the game are counted. If other aspects of the error are correctable, the procedure to be followed is included among the duties of the officials.

In your sitch, the officials should have used the AP to resume.