Your response, Curious, doesn't make sense to me.
If, by declining the penalty for A's illegal forward pass, "it simply becomes an incomplete pass", then this should also work in the OP with the EZ involved. But it doesn't. It's STILL an IFP.
If the IFP is not to be penalized because B declined, then the ball should go over to B at the A5 (spot of the IFP/end of the run).
B declining a penalty doesn't CHANGE what really did happen, it just means the penalty isn't enforced by yardage.
That's why, if B declines a distance penatly for A's USC, that A player STILL gets one counted against him and a DQ if it's his second.
In the above variation by cbrunnjo, if B accepts, they would get first and goal from the 2 1/2 (half the distance from the spot of the foul which is the A5). If B declines, they would get first and goal from the A5 (result of the play).
You can't give B (or A) the option of saying to the officials, "we're declining it because we think it's a bad call and that IFP is now going to be treated as a legal pass." An official called the pass illegal, and unless overruled by a subsequent discussion with fellow officials on the field, that pass is still illegal and treated as a dead ball at the spot of the pass.