Of course, the 777 does have moving throttles.
When the autothrottle is in HOLD mode, aircraft speed is assumed to be controlled by pitch, so the thrust does not change. The surprising thing is that there is no 'wake-up' from this mode.
The assumption is that the correct pitch will be maintained by the (auto)pilot and that a lower altitude will always be selected in the MCP.
Sounds like 767, but since VS mode was selected in this instance, would the A/T have been in HOLD mode?