Believe you should have allowed the sub to enter after the first free throw and here's why. I had almost this exact same situation happen to me this year except with a little added twist.
A1 called TO before the first FT, then tried to sub after the 1st horn. We told the sub, A6, to wait. After the first FT, B6 reported to enter the game. We motioned in both A6 and B6. Coach of B said we could not allow A6 to enter because she reported after the 1st horn, but insisted that his sub could enter since she did not report as part of the timeout. We allowed both to enter the game since this was the next opportunity to enter the game. The only time a sub is not allowed to enter is if that player had just came out of the game and is trying to re-enter before the clock has been started.
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