NCAA review question

[Berkut]

Saw something rather odd in the Arizona-BYU Las Vegas Bowl this weekend.

It is 3rd and goal from the 4 or something along those lines. BYU runs a play, and Arizona has 12 men on the field. BYU is stopped short. They are lining up to try again, Arizona still has 12 men on the field.

Someone actually counts, and a flag is thrown prior to the snap, presumably for dead ball illegal substitution, half the distance.

The referee goes to the replay, sees that there were 12 men on the previous play, and decides the flag is for THAT penalty, and calls illegal substitution on the play that is already over - and of course, that means that they are going to replay 3rd down, rather than 4th.

Didn't matter in the long run, but I was very surprised that he did that - or that he could do that. Is that actually a proper use of replay, under the college rules?