Illegal substitution situation

[Duffman]

I had a disagreement with a fellow official doing youth ball earlier this week, and was looking for some clarification.

I was administering a throwin after a time out from the end line as new trail. After getting a thumbs up from my partner I put it in play. Team A inbounds it, and A1 dribbles into the front court. He attempts to pass to A2 when B2 tips it out of bounds. As I jog over to the throw in spot A1 says to me "they have six". Sure enough I see one player walk off the court and sit on the bench and count five still on there.

As this is a 5th 6th grade church league neither coach was interested in pursuing it, both essentially said no harm no foul, and we put it in play and kept going.

Inbetween games, and after giving my partner a semi-serious toungue lashing for his inability to count and giving me a thumbs up (something we did pre-game for), we discussed whether or not we should have issued a T for illegal substitution, and who would get the T.

My partner thinks we couldn't have done anything even if the coaches had wanted to as we didn't notice while the ball was alive. I was most certain that 10-2 indicated that we could call a T if we noticed prior to the ball becomming dead and live again. Which was correct?

Further, assuming that the player on B legally reported during the time out and entered the court how would you access the T? Am I correct in thinking since the player entered legally the player illegally participating would be the player that didn't leave and would be bench personnel, therefore the T would be an indirect against the bench?