If you watch for this, you will see it multiple times in a college game with the proliferation of RPO offenses. Kniple was barely past the 3 yard limit at the time of the pass. He was engaging defenders for most of the play and his actions did not fool the defense or violate the spirit of the rule. He would have had to be down field either earlier or farther to draw a flag in college.
It didn't have an impact on that play, but had he thrown it to a TE behind the LBs, I think there's a case that it influences the play. They are trying to get strict about that limit. Coaches with teams that don't use RPO have been lobbying hard to tighten up linemen downfield.
I love the Sportstreatise Article Cyclonetrombone posted, as it hits on two misconceptions that bug me (and I always complain about on here).
First - the comparison of players with WVU. This constant talk about how every team not named KU has a big talent advantage over ISU, so ISU is going to shorten the game and limit mistakes. WVU, along with TCU, is probably at the top of the next tier below UT and OU in the conference, yet from a recruiting rating and measurable standpoint, ISUs D was very comparable.
Second, the idea that ISU is running some gimmick defense that people are going to "figure out" and start beating is really uninformed. Or that if you run a three man front as Tommy Tuberville thinks, you just keep running the ball until the defense gets out of it. OSU ran the same type of defense in the early Air Raid days, and WVU has played a very similar style for quite some time. The difference was these teams were simply using it try to get more speed on the field. First, you don't have the right guys on the DL, you are going to get pushed around. You have to a man on the inside. You also can't simply take pin your ears back 4-3 edge guys, throw them out there as DEs in a 3 man front and think they're going to succeed. Guys can certainly do both, but the approach is very different.