I think there is a misunderstanding that 'the line' is a fold line. I've played in many casinos where there is no line. Just because cards have crossed that line face up doesn't automatically make them dead.
The most important bit here is was there a verbal statement 'all in'. If we look at Robert's Rules, which has been on display in most poker rooms I've played in, then
A verbal statement denotes your action and is binding. If in turn you
verbally declare a fold, check, bet, call, or raise, you are forced to
take that action
If the player announced all in then the bet stands and other player can call or fold.
Two other rules worth mentioning here regarding 'dead hands' Note the section on Dead Hands make no reference to 'the line'
You throw your hand away in a forward motion causing another player to act behind you (even if not facing a bet).
You say the player tabled his cards inside the line. This to me is very different to throwing them away in a forward motion. The rules on dead hands also say....
Cards thrown into the muck may be ruled dead. However, a hand that is
clearly identifiable may be retrieved at management’s discretion if
doing so is in the best interest of the game. We will make an extra
effort to rule a hand retrievable if it was folded as a result of
false information given to the player.
In the situation you describe the cards never went into the muck. They are also clearly identifiable. So it stands that the hand is live and they have not folded. Of course by making this mistake they have disadvantaged themselves as the other player knows if they are winning of not thus denying the all in player extra value or loses a bluff. This is punishment enough for the mistake and the rules don't punish them further by declaring the hand dead.
I did once witness this situation live once where a player went all in and tabled cards, admittedly pre flop. It was ruled the players was all in and other other player was able to decide if they wanted to call or not based with the information of other players cards.