Your school is really stupid. But I still think you will be OK. Because USCIS has approved your F-1 instatement, they of course knew the duration you were out of F-1 status (from 12/99-04/02). After they approved your F-1 instatement, you should have no status problem. So,just send the reinstatement I-20, and all other I-20 Forms, OPT/EAD to USCIS for the RFE.
But if you still feel unsafe and if your current status is H-1 or other non-immigration status (Not AOS), you may go to Mexico or Canada to get an H-1 visa (or other visa) to come back as soon as possible. Once you do that, all the unlawful presence will be cancelled.
But if you still feel unsafe and if your current status is H-1 or other non-immigration status (Not AOS), you may go to Mexico or Canada to get an H-1 visa (or other visa) to come back as soon as possible. Once you do that, all the unlawful presence will be cancelled.