[canoeman06]

Yeah, that's correct. It's not so much as to who the batter was, but the spot in the lineup. Essentially, the 3rd batter in the lineup was the one officially called out to end the 1st inning, even though he technically never made a plate appearance, therefore making it a not so typical 1-2-3 inning, therefore having the 4 spot up to start the 2nd inning.
If the first 2 batters got out, then no matter if the 3rd kid that went to the plate hit a HR or struckout, the 3rd spot in the lineup would be the one charged with the out, making it the 4 spot to start the 2nd inning.
In short, you have to account for all 9 spots in the lineup, each time thru the lineup. By rule, this is the same as no one at all batting in the 3 spot this time thru, forcing an out to be placed in that spot.
Did I just confuse you even more? Hahaha.

Thanks, but my question is should some kind of penalty have taken place ???
At least an out somewhere ???? No penalty was inforced "Zero None Zilch"