The correct action for the defender in this case when hearing the foul call is to continue playing until the offense tells him to stop?
I think it’s good practice to continue playing until play actually stops. i.e., until you see the thrower recognized there’s a call, or until the outcome of the pass is determined (if a pass is made). That way you avoid such problems, and can sort out which section of the continuation rule is relevant once possession has been established.