End of game timing issue

[just another ref]

Tonight, BV, I am the R. Inside 30 seconds, home hits a 3 to cut the lead to 3. Visitors quickly inbound against pressure. V1 beats his man off the dribble.
Defender tries to recover, but commits an obvious foul near the sideline, probably 10-15 feet from the division line. I make the call from trail. But now partner steps in from the lead and says "No, I had a timeout." I did not hear his whistle at all. He reported the timeout, called by the home team. I stepped up and asked when the request was made. He said it was on the made basket. OK. Clock shows 9 seconds. But, when the teams break out of the huddle, someone points, and I see that the clock now shows 16 seconds. I step up and ask the timer what the deal is. He says basically, that even though he stopped it on the whistle, he knew that a considerable amount of time had elapsed after the shot was made and ball was put back in play. He also apparently knew that the only time Home could have properly been granted the timeout was before the ball became live again. So, he adjusted the time back to where he estimated it should have been. I asked my partner if he knew what was on the clock when he granted the timeout. He said "No, but let's just leave the 16 up there and get this over with."

What would you have done?