If the players from the attacking team were already inside the penalty area when the kick was taken, it would be encroachment whether or not the second player touched the ball. In that situation:
1. If the goal is scored, it is nullified and the kick is retaken.
2. If the goal is not scored, there is no re-kick. If:
a. the ball crosses the end line untouched, it is a goal kick.
b. the ball rebounds into play or is deflected out of bounds by the goalkeeper, play is stopped and an indirect free kick is awarded at the spot of the encroachment.
c. the keeper saves and holds the ball, play continues from the goalkeeper as normal--no free kick. Sounds like this is what happened...in which case, good officiating!
(This is all, of course, if this was a HS match under NFHS rules; for a club match under the Laws of the Game, an indirect free kick from the spot of the infringement would be the result in any case if the ball did not enter the goal.)
