OK PiggSkin, I'll relent. There is a foul there. It's not IS because he is still a player unless you determine that he left the field to gain an advantage. It's not IP same reason. It is (drrrrrrrrrrrrrrrr(drum roll)) a numbering violation. 5 yard foul at the snap. You see the numbering violation section is the only place in the rulebook where it defines where B can be. It says B players must be on their side of the LOS. When discussing position it is assumed but not stated that positions are on the field of play.
We're not going to let him get away with coming on after the play starts.
This BTW is the same foul if a B player lined up in the A backfield and A snapped the ball. Numbering violation. 7.2.5 Have won a lot of bets with this rule.

We're really parsing words here, but...
 

That's close, but if you had bet me, I still wouldn't be paying... :D

7.2.5(a) says:
At the snap at least seven A players, five of whom must be numbered 50 to 79, shall be on their line of scrimmage. B players <B><i>may</i></b> be anywhere on or behind their line...

It doesn't say "shall", "must", or anything like that... It just states that it is permissible... (As opposed to the positional requirements of A...) At best, in only implies what we're looking for... The book has got to be more specific than that...

Plus, there's no way I'm gonna go out and announce the foul as Numbering violation... It just doesn't make sense...

Hold on Jim S. I wish you had a bet with me. 7.2.5 has nothing to do with the play in question and is not the only place in the rule book where it defines where B can be. For starters, checkRule 2.8, 2.24.3, 7.1.6

Nah Bob. None of those require a B player to be on his side of the LOS to Start the play.
2.8 defines encroachment (a place where no player can go)
2.24.3 only defines what is a defensive lineman, doesn't require anyone to be one.
7.16 again deals with encroachment. Again does not require that a B player be lined up on his side of the LOS, only that he not encroach the NZ.

A previous post stated that 7.2.5(a), Numbering requirements, was the only reference in the rules about where B could be. I was pointing out that there were other references and I still maintain they are all pertinent, although none of them relate to the original play in question. And I left out 3.7.6 which says an entering substitute shall be on his side of the neutral zone when the ball is snapped or free kicked. That's pretty clear. Now if you are going to say the player was not an entering substitute but one who was already in the game, then he also may not encroach. Take your pick of the rules making encroachment a foul.