Ignoring the level of play issue (since I agree with a couple of the other posts that this level should not have umpires), the "rule of thumb" of a muffed play on a batted ball for continuing to protect the fielder is "a step and a reach" - if the ball is within a step and a reach, she is still protected, beyond that, the defense does not have unlimited freedom to chase the ball all over the infield expecting the runners to stay out of their way.
However, the umpire in this situation has serious confusion issues...
Delayed dead ball, followed by interference call, followed by calling the lead runner out and advancing the other runners 2 bases???? Yowee.
