Horrible call, but instead of huddling up for 10 minutes, how come they never came over and watched the replay? They have sound on those replays, so they could tell, when the office blows his whistle and clearly see the KSU player had control and was falling out of bounce when he signaled for the timeout which is illegal.
Hopefully the league reminds all officials about the rules this week, and chews the crew for calling it wrong, not looking a the tape, and then after talking, making the wrong call in the end.