Coach calling timeout and walking onto the field while ball is still live

[Side Retired]

High School ball tournament NFHS rules. Runners on first and third. Count and outs don't really matter, but it was 1-0 with no outs. The third base coach gave signals to his runners and batter. Then, he must have realized he gave the wrong signals because he made a sudden racket, saying whoa, whoa, whoa, timeout, as the pitcher was in motion to come home to the plate and the ball might even have already been released. As the coach is calling timeout, he actually walks out onto the field and all the play ceased. The batter stepped out of the box, the fielders all relaxed, and the runners all returned to their bases. The pitch came across the plate and the umpire called it a strike. Then, the umpire called timeout and then told the coach that the coach's timeout request had not been granted. The umpire called coach's interference and ruled a second strike, making the count 1-2.

The question is, if there's coach's interference, isn't the batter or runner supposed to be called out? And which runner, the one on second or the one on first? I figured it should be the lead runner. Someone else in the stands said it should have been the batter who was ruled out. 

Not that this matters but I believe the third base coach is a former professional minor league player, because he seemed to carry some gravitas with both teams and someone said he is always pulling stunts like this.

[Velho]

There is no rule to support for a second strike or anyone being out (and good on the plate for grabbing the strike)

Resume or not, this calls for a warning, dugout restriction, or immediate ejection.

[Coach Carl]

I'm travelling so I can't get the specific rule and language, but, in FED, the batter stepping out of the box is a penalty strike.

Batter steps out (penalty strike), ball stays live, pitch is a strike.  You have two strikes added to the count.