It IS technically a muff. So if he hadn't called for a fair catch, it would have been legal to tackle him, take the ball, what-have-you. HOWEVER, for a fair catch, as has been stated many times in this thread, the protection for kick-catch interference remains in place until the ball hits the ground. And if the catch is made, then the ball comes back to where he first touched it.

Rule 6 Section 5.b:

"If a Team B player makes a valid fair catch signal, the unimpeded opportunity to catch a free or scrimmage kick continues if this player muffs the kick and still has an opportunity to complete the catch. If that player (or another Team B player) subsequently catches the kick, the ball is placed where the player making the signal first touched it. This protection terminates when the kick touches the ground. (A.R. 6-5-1-I-II)."