The outland process involves the assessment of the sponsor at the Case Processing Centre in Mississauga first - and then, if that's approved, the application is sent to the overseas visa office for the applicant's assessment. If the application was submitted as incomplete, CPC-M would send it back with instructions on what needed to be fixed. They wouldn't make a decision on it and then send it back - so, if you've got decision made on the sponsorship part, it's not coming back at this point for more info. It was either approved or not based on whether the sponsor was found eligible. You'll need to wait for the decision letter to know for sure.
If the sponsor is found eligible, the application will be on its way to the overseas visa office for the applicant's assessment. The overseas visa office might contact you and ask that you produce additional documentation, but they won't ever send the application back to you.
If the sponsor wasn't approved, whether the application still goes to the overseas office depends on whether the sponsor understood the choice between two little checkboxes in Question #1 of the sponsor's application form IMM1344A where it says, "If you are found ineligible to sponsor, indicate whether you want ___ to withdraw your sponsorship (all processing fees less $75 will be repaid), or ___ to proceed with the application for permanent residence". If your sponsor checked, "proceed", the application will go on to the overseas visa office, even though it will not be possible for it to be approved. Sponsorship aps are not able to be approved without an eligible sponsor - don't know why they even give that option. I think, frankly, it's just a way to keep people's processing fees! If he checked to have the fees repaid and the application withdrawn, you'd then move forward with either appealing the sponsorship refusal or, more simply, fixing whatever the issue was and then reapplying.
Anyway, hopefully your sponsor's decision was positive and now your application is on its way to the second part of the process - your assessment for permanent residence.