Deep into added-on time of the Premier League fixture at Bramall Lane with the scoreline at 1-1, referee Robert Jones adjudged that George Baldock has been upended by Fabio Silva.
A lengthy VAR check led to the officials in charge of the technology backing Jones, who also told O'Neil in the dressing room after the game that he stood by his decision.
However, it has since been determined by a panel that the penalty - which was converted by Oliver Norwood to seal a 2-1 victory for Sheffield United - should not have been awarded.
The panel in question are said to have unanimously voted that Jones and the VAR team on that day had made an error, the latest call that has gone against Wolves this season.
O'Neil alluded to in his post-match press conference that Wolves had been cost as many as six points - the other contentious decisions coming against Manchester United, Luton Town and Newcastle United - in 11 games.
Speaking ahead of Wolves' encounter with Tottenham Hotspur on Saturday, O'Neil has described a discussion that he held with Webb on the morning after the defeat in Yorkshire.
The Englishman told reporters: "I had a good honest conversation with Howard where we feel things are and our opinions on it. There is an understanding on my part that Howard is responsible for trying to shift the standard and make things better. He's working really hard to do that.
"They recognise last week's decision [on the penalty] was incorrect so hopefully they can recognise the next one before Tuesday's reviews and recognise in live situations.
"We are where we are and we've had a few go against us. We need to be better and my only focus is making us better."
O'Neil claimed after their last fixture that football and the Premier League had gotten itself into a "crazy place" with its use of VAR.
Wolves will be attempting to move into 11th position in the top-flight standings when they square off against Spurs at Molineux.