In stroke play, let's say a player incorrectly decides to drop where he thinks his ball was lost, before the 5-minutes has expired:
According to the definition of "Ball In Play," the ball is in-play even though incorrectly substituted:
However, rule 20-6 allows the player to re-drop a ball improperly dropped:
So if I understand correctly, the following situation would exist:
1) The ball is in-play at the moment it was dropped, despite the drop being in the wrong place. The original ball is also lost the moment the incorrectly-substitued ball was dropped.
2) As soon as the player dropped the new ball, they became subject to the penalty under 27-1, stroke and distance. Of course the incorrect drop essentially canceled the distance part. Additionally, should they play the ball, they would be playing from a wrong place (20-7c) and would be penalized 2-strokes under the general penalty for 27-1. Thus, the total penalty would be 3-strokes.
3) Since the ball was dropped significantly forward of proper drop location, there's a significant chance the committee would rule a serious breach occurred. If they player does not return to the original position and play a second ball under the rules before teeing off (or leaving the green if 18), they could be disqualified.
4) However, if the player has not played the incorrectly-dropped ball, under 20-6, the player has the opportunity to lift and re-drop the ball in the correct place. If they do so, they would only be penalized the one-stroke under 27-1.
Does that summarize it correctly?