Calling time in this situation is at the discretion of the umpire. There isn't any rule that says the ball has to be back in the circle.
This is one of two situations where I see calling time get abused a bit. The other is when an infielder gets the ball, like on a throw in from the outfield, and the infielder immediately asks for time.
When an infielder has the ball and wants time, at that point runners can still legally advance. Calling time here can deprive them of that chance. Also, the defense is responsible for getting the ball back to the pitcher. You can have a wild throw or the ball might even go out of play. The umpire really shouldn't "help" the defense by relieving them of making a good throw back to the pitcher. Rule of thumb on this one: Don't grant the request for time.
The other is when a runner slides into a base and there is a play, often she will request time to stand up or dust herself off. IF...there are no other runners advancing, or no other imminent play, go ahead and grant time. Doing so doesn't give the runner any advantage.
When a fielder is "holding the tag" on a runner, I tend to grant a runner's request for time. BUT...before granting time too fast, there are a couple of things to watch for:
- Make sure that the runner has firm possession of the base. If there was a slide, make sure the runner is "holding the bag" and isn't still off-balance or in danger of coming off it. Runners DO overslide, overrun and lose contact with bases and can liable to be tagged out.
- Don't let the runner "off the hook" for maintaining contact with her base by granting time too soon. If the runner would still need to adjust her footing, or shift her position around to demonstrate "secure possession" of the base, wait a moment before calling time. The runner still has some responsibility to securely "hold the base" on her own.
- Watch that the "long tag" doesn't become a "hard push". The fielder cannot try to physically push the runner off the bag. If the fielder puts a little too much "push" into "holding the tag" and causes the runner to lose contact, when she otherwise would not have, the umpire can award the runner the base.
"Excessively holding tags on runners" is one of those game actions where the umpire has discretion to manage the situation as sees fit. You never know how players are going to react to this in a game. It can run the gamut from to "no big deal" to "delay of game" to "unsportsmanlike conduct" depending on how it plays out.
One thing an umpire can do to manage this is to speed the players along. Enforce the notion to them that holding tags will gain no advantage and they need to tone it down. For instance, if the tags are delaying the game or becoming rough, the umpire can repeat his safe signal and say to the fielder, "She's still safe!. Throw it back to the pitcher". (It helps if you say it in your grumpiest "mean old umpire" voice, signaling your disdain for the tactic.). This usually cuts down or completely eliminates "excessive tag holding".