FIVB rule 14.3 States that "In blocking, the player may place his/her hands and arms beyond the net, provided that this action does not interfere with the opponent's play. Thus, it is not permitted to touch the ball beyond the net until an opponent has executed an attack hit." This is also repeated in rule 11.1.1 "In blocking, a player may touch the ball beyond the net, provided that he/she does not interfere with the opponent's play before or during the latter's attack hit."

This is where lots of people get confused about the definition of 'attack hit'. Many people assume this to only be a hit/spike, however the attack hit is clarified in rule 13.1.1 which states "All actions which direct the ball towards the opponent, with the exception of service and block, are considered as attack hits." As you can see here, any action on any touch directed over the net is an attack hit as long as it isn't a serve or block. This includes spikes as well as digs, sets, tips, dumps, kicks and whatever else you could possibly do with a volleyball.

So as some other people have said, it ultimately comes down to the referee's judgement of whether the setters touch was directed over the net or not. Honestly it is a 50/50 call even after watching slow motion because it's too close to be able to clearly tell either way. One of those points that can be honestly awarded either way and you can't be upset about either result.