Here we go round the mulberry bush . . .
If it is an offense, it is a caution and an IFK.
If the ref is deeming it not an offense and having a word, but stops play, then the only possible restart is a DB. The referee certainly has the power to do this. But that doesn't make it right. IMHO, this would be an extraordinary step for a ref to take that should be reserved (if ever used) for truly exceptional situations. And even then, only if there is clear possession by the defense--anything else would have the DB causing more problems than any that were solved by stopping for the DB.
I think I disagree that it is "incorrect in Law." If, ITOOTR, the words don't rise to the level of an OFFINABUS send off, that doesn't mean the words were not unsporting. (If what you mean is that ITOOTR the words do rise to the level of OFFINABUS, but the ref doesn't feel like giving the red, it would be incorrect in Law to just give a yellow, then I would agree with you--but it would be more incorrect in Law to do nothing.)