Passing a runner = dead ball?
 

R2 is on second, R1 is on first. One out.

B3 lines a shot to the outfield fence. As an outfielder retrieves the ball and fires it into the infield, R2 & R1 round third, and R1 overtakes R2, R1 commits the second out. R2 retreats to third.

B3 gets caught in a rundown between first and second, and is tagged for the third out. Someone questions whether the passing of a runner kills the play. Umpire rules passing a runner does not kill the play, and rules the inning is over.

Is the umpire correct?

Yes, passing a runner is a live-ball offense, just as if a coach would assist a runner. The runner who is aided (by her coach or by passing her teammate) is out, but the ball remains live to allow the defense to play on other runners. Therefore, the umpire is correct.

Exactly!