Old test question

[Scrapper1]

While studying for this year's test, I came across this situation and I'm not sure if I'm misunderstanding the rule, or if I'm reading the question wrong, or what. So I'm asking for opinions.

A1 is fouled by B1 and is awarded 2 free throws. The foul is B1's 5th personal foul. The official notifies Coach B of the disqualification and starts the 20-second replacement period. A6 and A7 report to the scorer's table before Coach B replaces B1. The official beckons A6 and A7 into the game.

The answer key says that the officials were correct.

Now. . . I was always taught that NOTHING happens until we get a sub for a player who must be replaced. But it sounds like in this question, they're saying that you can bring in any subs who have legally reported, even before the sub for the DQ'd player comes into the game. Is that correct?

Am I mis-reading something? And by the way, (apparently) this question or some version of it has appeared on several recent tests and is always answered the same way, so it's not a one-time mistake in the answer key.