FED Rules- Runner hit by fair batted ball???

[ctblu40]

I just attended my local associations HS Rules interpretation meeting and am now baffeled by an ruling given by our interpretator.

A hand-out given to the membership at the beginning of the clinic has the following included-
Additional Note: A batted ball which hits a runner that is not declared out by rule. The ball is immediately declared dead. The runner is granted the next base and the batter-runner is granted first base, other runners advance if forced.
We were told that this ruling and interpretation is an additional note that should have been included in the 2006 Rules but was erroneously left out. I'm having a hard time accepting this ruling as it seems to punish the offense for no reason.
Has anyone heard of this?