For clarification from Article 7 of the ncaa football rules book:
Article 7. A catch is an act of firmly establishing player possession of a live ball in flight.
c. To catch, intercept or recover a ball, a player who leaves his feet to make a catch, interception or recovery must have the ball firmly in his possession when he first returns to the ground inbounds with any part of his body or is so heltd that the dead ball provisions of Rule 4-1-3-p apply.
You just defeated your own argument. When Reid hits the ground he does not "firmly" have the ball in his "possession." No one in their right mind can claim Reid firmly had possession of the ball when he hit the ground.
Also, you see the ball move slightly while Williams CLEARLY has both hands on the ball. This is due to Reid's "one" hand jockeying the ball; but he doesn't dislodge it from Williams' grasp until after Williams has landed on his back. Just my opinion from watching it over and over and over.
The rule as you state it, though, prove that it wasn't an interception. Reid did not have the ball firmly in his possession when he hit the ground. He took it from Williams after they had both hit the ground.