मातरपितरावुदीचाम्

Operational rule vidhi

According to Northern Grammarians मातरपितरौ is a valid form.

Word by word (padaccheda)

Substitute / term मातरपितरौ prathamā · dvivacanaTarget उदीचाम् ṣaṣṭhī · bahuvacana

Substitute / term Prathamā (1st case): in operational rules, the substitute or the thing introduced; in definitions, the term or its referent.
Target Ṣaṣṭhī (6th case): names what gets replaced, "in place of X" (1.1.49 षष्ठी स्थानेयोगा).

मातरपितरौ उदीचाम्

Pāṇini leaves out words that carry over from earlier sūtras. Expand to see the rule as a reader actually understands it.

As a rewrite rule (sketch from case endings)

उदीचाम् → मातरपितरौ

Replace udīcām with mātarapitarau. Inherited words (anuvṛtti) may add further conditions.

According to Northern Grammarians मातरपितरौ is a valid form.
This is formed by अरङ् substitution of the ऋ of मातृ ॥ The other form is मातापितरौ ॥

Śrīśa Chandra Vasu, The Ashtadhyayi of Panini (1897), via ashtadhyayi.com.