The "physically unable to advance" aspect is the key; but calling the out is still really nitpicking, lacking in common sense when the ball is dead. Besides, he said the ump called the batter out, not the BR.
What I said on the NFHS forum (first Q, not the CR sit.):
I say the batter is not out because exceptions are there to override rules. Looks like the rule came first and then someone realized the dead ball situations and wasn't sure or didn't have authority to remove HBP from the rule. Or maybe they were afraid players would confuse it with HBP in SP whne it's ball four. Or maybe it's just the usual lack of editing by our nation's educators.
The problem is how long the BR stays off the base before you have to call something. That's not in the rules, so I guess you have a quandary. Rule 10 again.