Why you are expecting any penalty? He has two players in the midfield, at least one players on each wing... I think the lost of the possesion is due to the lost of the player. His formation is still legal, IMHO.
Yes. u r right! he knows what the illegal formation is. That's why he changed his MR to Mc immediately after his MC sent-off.
but... at least 3 midfielders, not 2, please double check?