Once the EOS or COS is denied the tolling of unlawful presence ceases. There is no administrative appeal of the denial of an EOS or COS. 8 C.F.R § 214.1(c)(5); 248.3(g). The appeal is of the denial of the H-1B petition only.
This means that an appeal. if approved, will restore H-1 status but it will not have the effect of providing an extension since the extension is not appealable. As long as your previous I-94 is valid, you are in status. However, you probably should not be working for the new employer as the transfer has been denied and if the old company cancelled your previous visa, then you need an extension and therefore you are out of status and my answer stands. Also, since you are not working for the sponsor of your previous H-1, you are not properly maintaining your status and you may have problems. Again, this is a very difficult situation to clearly explain in this forum and my recommendation that you speak to your attorney was intended to avoid the need for this more extended discussion of your situation (which is still somewhat incomplete).
Another of the ambiguities created by AC21.
