Caught in Rundown

I'm not sure if that is the issue out here. I think it is just difficult to find umpires, at least in our area of the state.

Babe Ruth weekend tournament 8u. With a runner on first, ball hit to left center gap. Runner on first goes around third but stops on baseline, batter rounds first base, both runners feint but no try to advance. The centerfielder retrieves the ball, runs toward the infield, but never leaves the grass. Then he throws his hands up to call timeout and the umpire grants it. The batting team claims the outfielder cannot call timeout, that the ball must return to the pitcher before timeout is granted. Is this a common tournament rule or is this a baseball rule in general that outfielders cannot call timeout for any reason? Someone said the kid was playing smart by calling time so the runners would have to remain, someone else said action was still on. When is the umpire supposed to call timeout? I always thought he had full authority to call it it whenever. There was only one umpire. I noticed from reading through here that's uncommon in most places. It's pretty common here in California.