Had heard this as a little whisper and that he almost played for the U23s against Gillingham.
Could all depend on the makeup of the loan agreement. It's only the Oxford Mail who have said we activated a clause to cut the loan short. I don't remember the club using that wording - in fact, was there ever an piece on the official site saying he had gone? - KR was quoted as saying he's gone back to Reading to allow the new manager to look at him and decide whether he goes elsewhere.
Perhaps Reading decided they don't need him and no other offers so haven't agreed to end the loan? If there was no proper exit clause then I think it needs agreement from all 3 parties.
It could be that the loan termination date hasn't yet arrived but he just went back to Reading early I.e. We're still paying his wages until date X and could still play for us but has gone back. A bit like Jordan Graham and Ipswich.