Punt, fair catch, return, late hit

[brainbrian]

Saw this play over the weekend at an NCAA game and was wondering if they got the enforcement correct.

Team A punts, B1 signals fair catch but drops the ball. B1 then recovers the ball and proceeds to run with the ball. After he runs out of bounds he is hit late by A2.

The referees call a delay of game (5 yards) on B1 for returning a ball after he signaled for the fair catch. They also called a personal foul for the late hit (15 yards) on A2. Both penalties were enforced so the net difference was 10 yards. Did they get this one correct? Should the referees have blown the play dead once B1 recovered the ball?