It is incorrect to say that their sacraments are valid because there are many cases of people who inadvertently either got married, got their kids baptized or had first communions on this church only to then go to a catholic priest to tell them that either they don’t have a valid catholic marriage, the kid has to do first communion again or that the baby is not catholic. Again I am not discussing it, I know it for a fact because I do know actual cases and I know actual cases exactly with the American Catholic Church and our Diocesis given the number if cases has been pretty vocal warning people to not go to this church to get sacraments or to hear masses because you can’t even fulfill the mass requirement there. Any sacrament you take there even mass or confesiiin would be like if you go to an episcopal church.
There can be no single answer to the question “valid or not valid?”
It varies depending on the circumstances, and exactly which sacrament.
If this “church” performs a baptism using water and the Trinitarian formula, it’s a valid baptism. That’s why we cannot say that
everything is invalid.
Unless it’s danger-of-death no person baptised by them would be considered a Catholic. Anyone baptised by them would still have to be either received into the Catholic Church or the local pastor would supply what was lacking in the baptism.
The Catholic Church would not recognize any of their “first Communions” as equivalent of Catholic First Communion—no matter what. However, their Eucharist might (just might) sometimes be valid. Some of their priests are former Catholic priests, validly ordained. Some are not. Validity of their [attempted] Eucharist would depend first upon the ordination of the “priest” and if he was validly ordained, then other factors would be considered. Again, sometimes yes, sometimes no.
If two people who were born as members of this “church” get married in the presence of one of their ministers, it would be a valid marriage. If either party was ever Catholic, it would not be a valid marriage. Yet again, sometimes yes, sometimes no.
I do not doubt that in the exact circumstances you describe, the Catholic priest determined that every attempt at a Sacrament was invalid
in that particular case. But that does not necessarily translate into saying that every attempt at a Sacrament made by them is automatically invalid.
Yes, Catholics should be warned against participating. No doubt. And under no circumstances should any Catholic ever actively seek Sacraments from them. However, the question of “valid or invalid?” just does not have a single answer.
In danger of death, any validly ordained priest can absolve a penitent. If one of their priests is a former Catholic priest (and some are, though most are not, as far as I know), then he can still validly absolve a dying person.