Infield fly rule. Can runners advance?

[TIMAR]

We had a game the other night in which my daughter was playing. She is in Little leage fast pitch in Kansas. The umpire called the infield fly rule and our batter was out. Our coach, seeing that the defense was sleeping, advanced the runners and the umpire let them stay. I thought it should have been a dead ball and runners would have to stay where they were. Who is right?