It was a gorgeous touch and pass, linesman ruined it, sadly.
To be honest, I agree with the rules as they are. It's the managers job to assert his authority, and anybody who outright defies instructions will be dealt with after the game, but in the moment, the game must continue.
I guess the only thing that could do with being clarified (and doesn't need a laws change) is how the referee is to proceed when the player refuses to go off. All very well to say the game must carry on, but the to-ing and fro-ing on Sunday went on a bit.