I agree the hand should be dead, if it touched the muck. However, just like so many other situations that we discuss, it's not always that easy. Let's take the exact situation but the third player (still holding his cards), were in the act of folding? Or had no intention of calling. If you did rule that Player A's hand is dead, how could you justify giving the pot to the third player who has not called the $400?
Making the correct call is difficult without being there. There are too many different scenarios that can affect the right call. When did this occur? Pre-flop? At the showdown?
If you did rule the third player the winner, don't you think Player A should at least get his uncalled $400 back?