It was/is(?) considered a Delay of Game penalty as I recall. No matter that it was a pathetic, anaemic, provocative and Debby Downer call. Not to mention cowardly. If an away team's coaches can't come up with a play call that doesn't rely on complicated verbals from the QB, then they aren't playing the game properly, or in some semblance of reality.
Michigan should have stiffened their collective upper lips and quietly run a play that (possibly) gained 23 yards and silenced the crowd – momentarily.
Enthusiasm and noise feed the broadcast beast. As many have pointed out in this forum, there are times when generating crowd noise is "nigh impossible" due to the number of "old farts" in the stands and the overall design of the stadium. I'm pretty damn sure that were the stadium tiered and domed to accentuate the decibels, that particular call on the part of ND-unfriendly refs would be common every game.
While watching that game on TV, I was very, very proud of those lucky enough to be in the stands. It was an "in your face, muthatruckers!" moment for me.
Oh, and should BGIF or others more knowledgeable than I chime in about the rationale behind the call, trust them.