I'm wondering what the correct ruling is for the situation below:

Seat 9 is in middle position and makes a standard raise for Excalibur's NL $1/3 game. His girlfriend in the cutoff, seat 2, calls and the big blind in seat 6 calls. I'm watching this all from the small blind in seat 5 (seat 4 has missed his blind).

Flop is all low cards, seat 9 bets $30, gf calls and while the bb is deciding whether to get in between them, the dealer loses her grip on her cards and they spill out onto the table. At least 7 of them are exposed right in front of seat 9. Gf later says she didn't see any of them.

The dealer collects the mess, expecting she will just be reshuffling them. But the floor says she has to return everybody's money because two of the players in the hand saw the exposed cards, while the third did not.

Of course, this is very upsetting to seat 9, who later says he had KK.

I later asked the floor guy if the dealer had not picked up the cards and instead showed the exposed cards to seat 2, whether the hand would not have to be redone.

He shrugged and said he was "just winging it."

What's the correct ruling in this situation and would it have changed things if the 7 exposed cards were shown to seat 2?