It's therefore truly staggering that these two pilots seemed unable to follow basic Flight Director System information, regardless of whether the aircraft was being flown via the autopilot in Control Wheel Steering mode, or not ?!!
On the contrary. The flight directors should never be used to recover from an unusual attitude. That is not their primary purpose. It may have been this blind reliance on FD indications that caused the first officer to lose the plot. All he had to do was to disengage the autopilot and autothrottles, get rid of the FD's and simply use his manual flying skills (presuming he had some in the first instance which seems doubtful ..) to return to controlled flight. Then, when he had the aircraft under control manually he could re-introduce the appropriate automatics at his leisure.
In fact under the heading of Automatic Flight, the 737 FCTM states in part: "Early intervention prevents unsatisfactory performance or a degraded flight path...reducing the level of automation as far as manual flight may be necessary to ensure proper control of the airplane is maintained".