I have never done Dixie ball, and have not studied their rules. However, their rules are online at
Dixie Softball Rules.
Here is the rule concerning slinging the bat:
7:06 If a batter slings her bat she will be declared Out.
NOTE: No warning is to be given.
NOTE: This is a dead ball call.
NOTE: Dixie Softball, Inc., recommends that umpires warn all players about slinging bats and the consequence of slinging a bat before each game starts.
Sounds like your umpire got it right except for the dead ball part - it would seem the runs should not have scored; runners returned to their bases, persumably at the TOP, or perhaps at the TOS ("time of sling"
).