Ump correction - Should have called time?

[Gottagame2day]

PONY Bronco (11&12), two outs, R1 and R3. PU & BU (Kids)

R3 leading, Pitcher throws to 3rd, R3 goes home, F5 throws home - Tag - PU clearly announces and signals "Out". approx. 2 seconds later he sees the ball was knocked loose and the announces "Safe" - good call.

Unfortunately, the Off (R1 and batter) and Def players had started for the dugouts and as you can imagine, chaos. Coaches and parents yelling "run/Tag'm, etc." R1 got to 2nd base after a pickle.

What should the Ump have done in this case?

TIA, Mark