Misdeal Question

Had this interesting deal happen at a home game that no one has really encountered before.

1/3 NLH

UTG opens to $10

fold

fold

fold

CO calls (Seat 2)

BU realizes now that he doesn't have cards.

What we realized happened is that seat 1 accidentally grabbed seat 2's hand. seat 2 then grabbed seat 3's hand (BU), and the dealer just mucked the two extra cards he saw sitting on the table close to him.

TDA rules say that once there are two actions with one of them putting chips in the pot the hand is live and a misdeal can't be declared. That feels like that applies here, so no misdeal, but what happens with the cutoff? should their hand be declared dead since it's not actually their hand? Do you just play it out as is?

The example I found was if the cutoff had 3 cards their hand would be dead, is having the wrong hand the same thing?