OK, as the game was played, SD called TO at 2:02, Denver made a play, the clock stopped at 2.
As opposed to, let the clock stop at 2, then Denver make a play, and DEPENDS ON THE OUTCOME OF THE PLAY, THEN CALL A TIMEOUT. <<< I'd much rather do this.
It's always preferable to take your timeouts on the front side of the two minute warning. You have to operate under the assumption that your defense can force a stop, because if they can't, timeouts don't do anything for you regardless, as your opponent just keeps gaining first downs until the game ends. If you assume every play will run 5 seconds off the clock, here's the breakdown:
Play 1: 2:07, takes 5 seconds, timeout called at 2:02
Play 2: 2;02, takes 5 seconds, two minute warning at 1:57
Play 3: 1:57, takes 5 seconds, ends at 1:52; no timeouts, so the clock runs down to 1:12
Play 4: Punt at 1:12 (assuming the defense has forced the stop)
If you take your timeout on the other side of the two minute warning, your breakdown looks like this:
Play 1: 2:07, takes 5 seconds, clock runs to 2 minute warning
Play 2: 2:00, takes 5 seconds, timeout called at 1:55
Play 3: 1:55, takes 5 seconds, ends at 1:50; no timeouts, so the clock runs down to 1:10
Play 4: Punt at 1:10
In this case it only saves 2 seconds (the two seconds prior to the 2 minute warning), but in literally every timeout scenario, the defense will have more time left on the clock if they take all their timeouts before the two minute warning and force the punt; there is no scenario where you will have more time if you save your timeouts unless you fail to stop a first down (but if that happens, generally you've lost anyway). So it was the right call, the defense just failed to convert. Usually this argument comes up when there's 30 seconds or so prior to the 2 minute warning and coaches hang on to their timeouts out of the stupid belief that they mean more after the 2 minute warning; 2 seconds isn't that big of a deal, but you're still on the wrong side of the math with your argument.