It's not the play you describe--which sounds like the one of the teams win the Division III college world series this year--but our travel team has run a trick play for years on the travel ball circuit that works probably 75% of the time. Situation is bases loaded and the runner on first "absent mindedly" tries to steal second "forgetting" that second base is occupied. The objective is to draw a throw from the catcher to first to score the run from third (or to get the player at first in a run down to score the run from third). This trick play involves "acting" on the part of the third base coach as well as the players and, at times, even the parents in the stands, who by now also recognize what is going on. In four years of watching this play be run, I've never seen it called as against the sporting rules, so to speak, and never seen another coach challenge it on those grounds. I don't know exactly what happened in your game, but, to me, it definitely doesn't sound like the right call by the umpire. Marriard or the The Man in Blue should be able to provide a more definitive answer.
In your example, can't the pitcher just stand there and then when the runner from first pauses (because 2B is occupied) they get called out on the lookback rule?