The rule needs revisited by the national committee. But don't think that it's just little kids that use the rule to their advantage.
I've seen "timeouts" called in college matches when a takedown was imminent.
The official has to take proper precaution and error in the side of safety. Most don't like it, but it's a lot easier than going to court because Tommy's arm was broke and he didn't stop the match to prevent further injury. Since the official is not a doctor, he has to error on the side of caution.
If this did happen - there is nothing to stop the official for removing the coach from the premisis. Nigel, what's the ruling on "unsportsmanlike conduct by coaches". I don't have my book handy. I would equate it to "punch him in the face." If a coach were to tell his wrestler that and the kid did it, most would say the coach would be removed. To me, these are similar situations.