Play situation

[paxsonref]

Game tied at 60. Both teams in bonus, all time outs are gone. A1 with ball, holding for last second shot. A1 shoots and misses, rebound by B1 with 1.5 on the clock. B1 instantly turns, signals, and shouts for a time out as he pivots. Official's whistle blows with .2 to grant the time out. Horn sounds and time expires. Officials discuss and determine that request was granted prior to horn expiration of time. They add .2 to the clock, asses a T to B for an excess TO. A gets 2 shots, makes 1, and inbounds at half court. Time expires on touch inbounds, game over, A wins by 1.

So the question is, do you ignore the TO request, knowing that they have no timeouts left? By rule, did the officials do what is correct? Any way this could have been handled better/differently?