Calling the illegal pitch

[Skahtboi]

According to the NFHS Umpires Manual;

"It is essential to be consistent and always extend the left arm straight out to the side (the delayed dead ball signal) as soon as the pitch becomes illegal, and say "illegal."

So, IMO, as soon as you detect an illegal action, you need to signal it. If play stops, then award the ball on the batter (and advance runners if any), and play on. If, as in the originaly scenario, the pitcher then steps back, we would still have an illegal action and subsequent awards.