Sorry to hear about the transfer denial. USCIS is making things difficult for #usa:h1b workers these days.
Your status after H1B transfer is denied but i94 still valid
Coming to your #h1b-transfer denial, you are ‘OUT OF STATUS’ after the denial even if your i94 is still valid.
This is because you joined the new employer based on USCIS H1B receipt number.
If you were still working with Employer A (who had your initial H1B approved), you would have been safe and can continue working with them even if this H1B transfer was denied.
I always recommend people to move to new H1B employer ONLY after the #h1b-transfer has been approved.
It is too risky to start working based on receipt only, although it is allowed legally.
A denial, like it has happened in your case makes things a lot complicated and difficult.
Can Employer B refile H1B transfer?
Yes, employer B can refile H1B transfer application again.
But, the chances of approval are very low if your job profile and employer credentials have not changed with respect to the previous application.
You are out of Status - Should Stop working and leave US to avoid unlawful presence
Since your H1B transfer has been denied, you are currently out of status.
I would advise you should STOP working immediately and move out of US to avoid adding any more complications to your case.
Employer B can file for your H1B and you can wait outside or US for the approval. Once H1B is approved, you can re-enter US and start working again.
Some people may advise you to stay in US without working, since your i94 is still valid.
But, that is not a good advise since you are OUT OF STATUS and you are accumulating unlawful presence since the date of your H1B transfer denial.
Your current i94 is based on the H1B status which is not valid now.