What is the ruling regarding an Imam who forgot to perform the Tashahhud in the second rak'ah of the Maghrib prayer, then stood up for the third rak'ah, and when alerted by the congregants, he thought he was in the third rak'ah, so he sat and made the tasleem, then rectified the situation and completed his prayer and performed the prostration of forgetfulness (sujud al-sahw)?

What the congregants did by insisting on glorifying God (tasbih) with the Imam until they confused him in his prayer is a clear mistake. What was obligatory upon them was to follow the Imam as long as he had risen from the first tashahhud (definition) and stood up straight. Their prayer is valid due to their ignorance of the ruling. As for the Imam, he did what was obligatory upon him by standing when he was certain it was the second (rak'ah), and he performed the prostration of forgetfulness (sujud (definition) as-sahw) for omitting the first tashahhud. It is preferable that the prostration of forgetfulness be before the salutation (taslim (definition)).