Well, I'm NCAA - so the fact that the rule is called ILLEGAL TOUCHING, implies to me that the touching is illegal... but maybe that's just me.
The idea behind the rule is the same.
You didn't answer my question though.
The rule specifically says "legally allowed to touch or possess". If the rule was meant to be ruled on in the manner in which you are ruling, why wouldn't they include the disclaimer at all.... the "legally allowed to touch or possess" part is useless if players are ALWAYS allowed to touch the ball, and if the way you are ruling is correct, then they are ALWAYS allowed to legally touch the ball (kick in flight being about the only exception I can think of, and if this was the only time at which BIB is illegal by K, surely the rulewriters would have framed it more specifically). It seems to me that "legally allowed to touch" is SPECIFICALLY aimed at times when K is not legally allowed to touch the ball without ramifications - i.e. specifically THIS case.