Signal or Not
 

I saw this situation in a FED game yesterday. Bases loaded with one out. A line drive is hit to F4 who catches and drops the ball in what looks like it could be on the transfer. Both umpires determined that it was no catch so no signal was made. After a few seconds of everyone standing around in confusion, the defense started stepping on bases and tagging runners.

My question is how would you handle this situation with the drop? Would you not signal at all or would you give the "safe" signal to indicate no catch as is typically done on potential trap plays?

Always give a signal if the outcome of the play could be ambiguous. There are three potential calls here--catch, no catch and unintentional drop, or intentional drop.

Emphatic "No Catch" with safe mechanic - repeat as often as necessary

What are we there for, if not to communicate to the players what has happened when it's not clear? You MUST make a call on this play. Sounds like intentional drop to me... but if that's not what they had, they MUST signal safe like they would on any other close catch/no-catch call.

+1

Intentional drop, immediate dead ball, call the batter (and only the batter) out.

If the drop was "on the transfer" it doesn't sound like it was intentional. If the fielder is trying to retrieve the ball from the glove and fails to make the transfer (which is what "on the transfer" means) there is no intentional drop. HTBT for sure, but as stated in the OP, it was unintentional.

In other words it could also have not been on the transfer.

If both umpires ruled it was no catch then it could not have been on the transfer. You cannot have a transfer until you have a catch. Either way a signal should have been given. One or both umpires are at fault.
You're going to award the defense multiple outs because you failed to do your job?

Diffuse this situation (and protect the runners in jeopardy because you failed to signal promptly) by killing the play and ruling intentional drop. It's the right thing to do.