rule clatrification

[sloth]

Rule 7-2-7 "...the player in motion shall be at least 5 yards behind his line of scrimmage at the snap if he started from any position not clearly behind the line and did not establish himself as a back by stopping for at least one second..."

Here's the play. A2 lines up as a tight end. He doesn't assume a 3 point and he is covered by a recieve to his side. Prior to the snap the A2 takes a step back and goes in motion just behind the LOS (runs between QB in shotgun and offensive line). The snap occurs while he is still in motion. I've seen this paly and never thought to throw the flag. Apparently if I interperate this rule correctly, it is illegal motion. Also, does the false start also apply if he got in a three point and then tried to go in motion?

Sloth