This is for Babe Ruth rules. Less than 2 outs, a runner on first steals the base on the release of the ball by the pitcher. The batter is called out on the 3rd strike and the catcher drops the ball. Can the batter run to first since the base is not occupied, or is the base still considered as occupied, and therefore the batter is out?

Occupied at the time of the pitch. (Think of it this way - if catcher makes a throw to 2nd ... would you want that to be a force?)