Gah. What a mess.
Law 25A says "Until his partner makes a call, a player may substitute his intended call for an inadvertent call but only if he does so, or attempts to do so, without pause for thought. If legal, his last call stands without penalty; if illegal, it is subject to the applicable Law."
Ordinarily, this would be simple. It looks to me like this law applies, so S would be allowed to change his call, if the change is before his partner called. But it's not - it's simultaneous with his partner's call. So we look further into the law, and we find law 33: "A call made simultaneously with one made by the player whose turn it was to call is deemed to be a subsequent call." So S, who has made a call simultaneously with his partner's legal call, has called out of turn, and his call is, on top of that, insufficient.
Law 27C says an insufficient bid out of rotation is dealt with by law 31. Law 31 refers us, in the beginning to law 29, which says that offender's LHO (in this case, West) may elect to call, thus condoning South's call. No penalty, auction continues. If West does not so elect, South's call is cancelled, auction reverts to East. Now we're back in Law 31...
If East passes, South must repeat his call, which is insufficient, so now we go back to that law (Law 27) and West has the option to accept the insufficient bid, or not. If he accepts it, the auction continues and there is no penalty. If he does not, then South must substitute either a sufficient bid, or a pass. If he bids 2S, no problem, auction continues (although if the TD decides the IB "conveyed such information as to damage the NOS he may adjust the score" (Law 27B1(b))). If he bids anything else, or passes, his partner must pass for the rest of the auction.
If East makes any other legal call, South may in turn make any legal call. If that call repeats the denomination of his BOOT, then his partner must pass at his next turn. If the call does not repeat the denomination of his BOOT (spades), North must pass whenever it is his turn to call, and the lead penalties of Law 26 may apply. In either case law 23, regarding a damaging enforced pass applies (basically, it says if TD determines NOS were damaged by the enforced pass, he should consider adjusting the score).
So the answer to your question is yes, South has made a bid out of turn.
South's actual holding is irrelevant.
South should have called the director as soon as
he realized the bid he'd put down was not the one he wanted to make. Then the first thing the TD would have done (assuming he determines the TD call was before North's bid) would be to cancel North's bid (Law 9: after the TD is called, no player shall take any action until the TD makes his ruling). If South calls the TD after
North bids, he's out of luck. It's too late to change his call.