In this case, if the catcher's direct throw retires a runner the play stands, if not, the ball is dead and all runners must return to the bases they had most recently touched (before the catcher's throw).
They had most recently touched (before the catcher's throw). This was in this case. The catcher's direct throw retires a runner, if not, the ball is dead and all runners must return to the bases. The play stands a runner.