I suppose Mueller’s argument is that he has power to investigate anything he runs across during his investigation of Trump. But that can’t be a proper interpretation of the letter appointing him because if it is then it appears Rosenstein handed the entire DOJ over to Mueller. That would make Mueller the attorney general but only Trump has the power to appoint an attorney general. No. This letter has to be interpreted so that both Mueller and the DOJ proper are able to discern what is within the jurisildiction of each set of prosecutors. Otherwise it’s unconstitutional.
Still I don’t think this is going to bring the case to a screeching halt. Rosenstein can write a new letter or the judge will tell the DOJ that they need to take over the case from Mueller. It won’t be dismissed.