Guess I was watching a completely different game.
As I saw it, Spurs were up by 14 (actually 15 when Leonard made his 2nd FT) with about a minute to play when Carlisle benched their starters and so did Bud. After a 3 by Dallas and a TO by Leonard, Bud gave the chance to the new guy to smell the floor in what was supposed to be garbage time (up by 12 with 45 seconds to play).
Dallas bench played harder in those seconds (Neal TO, Collison 3, Blair TO) to the point of being down by 9 with less than 7 seconds to play.
You would expect at that time that the game is over but for some reason Carlisle decided to call a timeout. So far up to this point, I don't see any reasons for Bud to take Baynes out of the court.
Spurs defense is not good enough and Dallas executes well to score 3 more points.
You are up by 6 with less than 5 seconds to play, the logical thing to do is put the ball in play before the defense is set (or like b1gdon said, call timeout, but that didn't cross my mind as the best thing to do at that momnet in the game since I still believed the game was out of reach). Putting the ball in play quickly is just what Baynes tried to do. It was not a bad play or bad decision (inbound the ball to one of your best FT shooters on the floor at the time), just really poor execution.
At that moment, Bud calls timeout to make Baynes know that poor execution is not acceptable (just like Pop has done with so many players so many times) and subs him to make sure there are no surprises in the last 2 seconds of the game (still being up by 4 and with the ball in the Spurs hands so I would still consider those two seconds as garbage time, but I guess Bud wanted to make sure about it).
This is what I saw and other than some poor execution on Baynes behalf on 1 play of those 40 seconds he was on the floor, I don't see anything that either Baynes or Bud should have done different nor feel confused by what they did.