Phil is not offside. The gif I made of the full sequence was taken down for some reason (probably copyright) but here is a still frame of the second Mahrez looks up (gif shows this, as well), stutter steps (choosing not to pass), and then follows through on the doomed shot. He had the opportunity to play the simple pass for an all but certain goal. The stutter, more than anything, meant the chance had gone.
Watching the close up of Mahrez taking the shot, I am not even sure it was on target, so in some ways VVD saved him from further embarrassment (by making it look like he just missed a more difficult attempt).