It sounds as though your statement "he caught it in the air, coach" was a short form for "he caught it while airborne, and before stepping in the FC, coach".
Players catch a pass while airborne all the time, and no violations are called. Surely the coach did really think it is illegal to catch the ball while airborne. If he did, quite frankly, he might be the dumbest coach I've ever heard of.
Sure, the division line complicated matters, but I think your response is fine. If the coach doesn't know enough that this is a violation, then sadly not saying anything will cause the least confusion.
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Pope Francis
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