The restart is for whatever happens first. If the whistle was blown before the ball went out of play then of course the restart is a dropped ball, whereas if the ball went out before the whistle the retake should be a corner. Having seen slowed down replay it is clear the ball was over the line by some distance by the time the whistle was blown. Had there not been VAR, and rather (as an example) the AR had advised the referee had make a mistake, I could accept getting the restart wrong. But this shouldn't happen with VAR, Graham Scott should be saying something like "cancel the penalty, restart with corner kick as the ball was out of play when you blew the whistle".
Thank you for clarifying.
And therein lies the problem. If they can't get something simple like that right what hope is there. They need to recruit some good competent people to be VARs who don't need years of practical refereeing experience.