Out or not?

[genetoy71]

High school ball this week in Ohio. 2 strikes on the batter. Next pitch, batter swings. Bat hits ball. Ball goes straight back, touches catcher's glove, glances off glove, hits catcher's chest protector and settles in catcher's lap. Catcher grabs ball with bare hand and controls it then places it in her glove. Ball never touched the ground or came close to touching the ground. Plate umpire calls "out". Field umpire comes running in and says "No out. The ball has to go straight to her glove." The plate umpire changed his mind and said that the batter wasn't out. I asked "How is she not out? She swung at strike 2, didn't hit a fair ball, and the ball didn't touch the ground?" He just kept repeating that the ball has to go straight to the glove. Fortunately the batter was later put out and no runners advanced. Should the batter have been out as initially called given the situation as described?