Perhaps the rumor is related to this item in the Letters to the Editor of Pool & Billiards Magazine. I don't think I've ever met the writer.
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Thanks for sharing. If either of the two shots in which the object ball came out of the pocket was a jump shot, I'd disallow it. If not, I think the ref made the right call.
This very situation arose when I attended what I believe was the 1997 BCA Open, played primarily in the rooftop lounge at the Riviera in Las Vegas. During practice, balls came out of the pockets and onto the carpet on one of the tables on a couple of shots. The players knew, as did I, that the equipment was faulty. A referee was called over, and the ruling was the logical one, which was to disallow the shot if it had been a jump shot, otherwise to accept the shot as valid and allow the shooter to continue. I can't say whether this was a proper application of the rules of the game, but in my view, common sense prevailed.
Interesting that Cue Ball Kelly, whom I knew quite well, knew about Cranfield's 768 run. I knew that Crane suggested to me circa 1980 that Babe had more 300+ runs than any player in history and that his claim of two different runs of 700+ was highly credible. As for me, I once saw a framed newspaper article in which Cranfield's 420 on a 10-footer was noted, a number to which neither Willie or Irving came even close, but I've never read anything about Babe's 768.
I'm looking forward to seeing John's historic run of 626 recognized as the world record exhibition run very soon, because it could possibly usher in a time when pool's history is documented more thoroughly than in the past.