You are correct and your example is not.
The second it refers to pronouns (in the plural) and needs to be replaced with them. Using it in this context is wrong.
The difficulty with choosing between it and they/their/them generally arises from the dual use of they as a singular non-gender pronoun in the place of it where the sex/gender of the person referred to is unknown.
Most English speakers, for example, would not use it to refer to a child.
They prefer to say: The child was playing on the bank when THEY fell into the stream rather than when IT fell into the stream.
This complication is avoided in a number of other languages because the word child itself has a gender that is not related to the sex of the child concerned.
English does not have this advantage and it divides speakers who prefer the singular they/them as pronouns for words such as adult, child, teenager, officer, official and those who don't.