RWAU80

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Nope, the quarterback never subbed out, a receiver did and did not come back in.
Actually the rule (as shown above) states that the team must be set for one second after a huddle or shift and before the snap. It does not say that they have to be set between the officials whistle and the snap. The team can get set before the ready for play signal.
ARTICLE 2. a. Shift. After a huddle (Rule 2-14) or shift (Rule 2-22-1) and before the snap, all Team A players must come to an absolute stop and remain stationary in their positions without movement of the feet, body, head or arms for at least one full second before the ball is snapped. This is how the rule reads as you stated above. The point is that Auburn was able to put their field goal team on the field during the review and get them set for more than one second. The rule states that the team must be set for one second AFTER A HUDDLE, OR SHIFT, and before the snap. Auburn's Field goal team huddled on the sideline (perfectly legal) during the review, got in formation and were set for more than one second until the official blew the ball into play and snapped the ball immediately on the whistle. All legal. Once the ball was snapped, the play could be legally completed. The entire play, according to the rule, was legal. Saban actually looked like a person unfamiliar with the rules at his halftime and post game interviews, not a good look for such a good coach.
SECTION 5. Substitutions Substitution Procedures ARTICLE 1. Any number of legal substitutes for either team may enter the game between periods, after a score or try, or during the interval between downs only for the purpose of replacing a player(s) or filling a player vacancy(ies). Legal Substitutions ARTICLE 2. A legal substitute may replace a player or fill a player vacancy provided none of the following restrictions is violated: a. No incoming substitute shall enter the field of play or an end zone while the ball is in play. b. No player, in excess of 11, shall leave the field of play or an end zone while the ball is in play (A.R. 3-5-2-I). PENALTY [a-b] Live-ball foul. Five yards from the previous spot [S22]. c. 1. An incoming legal substitute must enter the field of play directly from his team area, and a substitute, player or departing player must depart at the sideline nearest his team area and proceed to his team area. 2. A departing player must immediately leave the field of play, including the end zones. A departing player who leaves the huddle or his position within three seconds, after a substitute becomes a player, is considered to have left immediately. d. Substitutes who become players (Rule 2-27-9) must remain in the game for at least one play and replaced players must remain out of the game for at least one play, except during the interval between periods, after a score, or when a timeout is charged to a team or to the referee with the exception of a live-ball out of bounds or an incomplete forward pass (A.R. 3-5-2-III and VII). PENALTY [c-d]—Dead-ball foul: Five yards from the succeeding spot Read Article 2 section d. above. By rule, Saban could not return regular defense (or remove Waddel he 12th man) unless a timeout was called in this situation. Penalty for 12 men in defensive formation when SNAP IS IMMINENT or for not allowing subbed player to remain in the game for at least one play is the same penalty. 5 yards from previous spot.
That would be much cheaper than the headsets he keeps breaking.
Once the Punt return team had subbed into the game, the regular defense, by rule, have to remain out for one play unless there is a timeout. This is Section 5 Article 2 Section d of the NCAA 2019 Football Rule Book. SECTION 5. Substitutions Substitution Procedures ARTICLE 1. Any number of legal substitutes for either team may enter the game between periods, after a score or try, or during the interval between downs only for the purpose of replacing a player(s) or filling a player vacancy(ies). Legal Substitutions ARTICLE 2. A legal substitute may replace a player or fill a player vacancy provided none of the following restrictions is violated: a. No incoming substitute shall enter the field of play or an end zone while the ball is in play. b. No player, in excess of 11, shall leave the field of play or an end zone while the ball is in play (A.R. 3-5-2-I). PENALTY [a-b] Live-ball foul. Five yards from the previous spot [S22]. c. 1. An incoming legal substitute must enter the field of play directly from his team area, and a substitute, player or departing player must depart at the sideline nearest his team area and proceed to his team area. 2. A departing player must immediately leave the field of play, including the end zones. A departing player who leaves the huddle or his position within three seconds, after a substitute becomes a player, is considered to have left immediately. d. Substitutes who become players (Rule 2-27-9) must remain in the game for at least one play and replaced players must remain out of the game for at least one play, except during the interval between periods, after a score, or when a timeout is charged to a team or to the referee with the exception of a live-ball out of bounds or an incomplete forward pass (A.R. 3-5-2-III and VII). PENALTY [c-d]—Dead-ball foul: Five yards from the succeeding spot Therefore even if Alabama did not have 12 men on the field, they could have been penalized for illegal substitution for not leaving subbed players in for one play. There is no penalty for having more than 7 men on the line of scrimmage as long as 5 of these players have numbers between 50 and 79. They can have 11 on the line, but it would be hard to retrieve the snap, but not illegal by rule.