That makes sense. Paying the sponsorship fees didn't help you at all because you failed to then submit the sponsorship application. The purpose of paying the sponsorship fees and showing this as part of an extension application is to show intent that the sponsorship application is going to be submitted soon. If you don't follow up on that action for many months, showing that you've paid the fees really doesn't have any value. IRCC would have looked at the extension early this year, noticed that you had paid the fees but failed to submit the sponsorship application for many months. So from IRCC's perspective, paying the fees ends up being sort of a hollow promise that you failed to make good on.It was submitted in July before his expiry in August. He was implied status until feb 22 when refusal letter was received.
I'm changing my answer based on this. Get the full spousal sponsorship application in first. Do this asap. As soon as the sponsorship application is submitted, submit the restoration application with proof the spousal sponsorship application has been sent in (e.g. evidence of fees, evidence of courier delivery, etc.).