That's not how time works in this episode.
Annorax removes a species from existence.
The universe changes.
Space changes more than time, but space everywhen changes.
Sitting "outside" of time watching the effect on the single non branching universe, his crew remains the only witness to the all the previous manifestations of the universe that were demolished by his process.
That's how his tech worked, and that's how he thinks the universe works, he could be wrong, but his tech works, which either he's right about how the universe works or he's blundered through a series of fortunitous set of conincideces where his theories seemed to have panned out, despite being wrong.