Ok time to end the guessing.
I called the strike per rule. Strike 3, batter out.
Did I get grief? Oh yeah. OC basically asked WTF, and I had to explain to him that if she steps out of the box, I have to call the strike, regardless of pitch location. I believe the response was something like "you've got to be kidding me?" No, coach, I'm not. I don't like the rule, but I gotta follow the rule.
Plus I'm thinking I need to get outs on this team anyway since Team Worst can't do it.