I'm Lucy, and I'd be happy to answer your questions today. I'm sorry to hear that this happened.
No, that's not legal. They're free to choose whether they want to ask the new tenant for a security deposit or not, but they don't get to decide to keep YOUR deposit for that purpose. They're only allowed to keep your deposit to repair damages to the premises that you caused, or to cover unpaid rent. Code of Georgia, Section 44-7-34. They can't keep it as a penalty for you breaking the lease, either.
The 30 days is a firm timeline for either returning your full deposit or sending a written notice of the reasons they're not returning it. Failure to do that means they FORFEIT their right to keep ANY of the deposit. Section 44-7-35. They also forfeit their right to sue you for any damage to the premises. You can't get double - that same statute actually entitles you to three times your deposit, plus attorney's fees (which could wind up being at least a few thousand dollars). Had they properly accounted for the deposit, they would have been able to charge you their expenses associated with relisting the place, because you did break the lease. But now they have to give that back, too.
Also: you were only obligated to pay rent until the day the new tenant moved in. If you paid for all of March and they got a new tenant on 3/15, they owe you a pro-rated refund for half the month's rent.
It's not too late to sue - the statute of limitations in Georgia is 4 years for an oral lease, 6 for a written lease.
One option, if you'd prefer not to go to court, is to send the landlord a copy of that statute and give them a deadline for refunding your $895, your full deposit, and your half month's rent before you sue them for all that, plus the penalty and attorney's fees. Or you could go to court and file a lawsuit. These cases are typically heard in Magistrate's Court, where you're allowed to seek to recover up to $15,000. For more than that, talk to a local attorney.
It's important that you are 100% satisfied with my courtesy and professionalism. Thank you.