Wow. Yeah, that's a bit of a puzzler. Here's my best guess, and don't hate me if I'm wrong
. It sounds as if you've knit part way through a row, and then are going to stop and fold the fabric in half, so that the 2 needles are now parallel to each other, right up next to each other, and you have some "live" sts on each. The right side of the work will be facing you, and one of the needles is closer to you, and the other is in back of that one.
It's as if both of those needles, held together, are your left hand needle. You're now going to take a 3rd needle, and that's your right hand needle.
Now, with that 3rd needle, knit 1 st from the from the needle closer to you. Now, keep going, and casting off in a K1 P1 rib, cast off 7 more sts-- which are actually 14, because for each cast off st, you're going to take the 3rd needle and put it through the next st from the front needle AND the next st from the back needle, as if they were one st, like a 3 needle bind off.
When you are through doing this, you will have 2 sts on your 3rd (right hand) needle-- that first st you just knit, and the last one left over from binding off. It sounds like you are supposed to take those 2 sts, and put them back on the left hand needle, and then continue.
There are a couple of things I don't understand-- the first is, are you now re-knitting those 2 sts, are they part of the next K9? They'd kind of have to be, I guess. The other is, they all of a sudden make it sound as if you only have 1 needle in your left hand. When you do that bit at the beginning of row 27, right before you folded the fabric back, did that leave you with either 7 or 8 sts on 1 of the needles? When you do the bold part, did that empty 1 of the needles? If so, then it's okay. But if not, I'm stumped.