I can find only two AMA rules that might apply. Maybe there's more, I couldn't find them.
The first is no flying within 25 feet of anyone but the pilot and helpers on the flight line.
OP said the flyer "pulled up into an Immelman type maneuver" 50-75 feet from the pits and spectators.
If this put the spectators closer than 25 feet to the aircraft, then end of story, he broke the rules.
But, we don't know that, because the OP left out the field layout dimensions.
The other is no careless or reckless flying. That's pretty subjective, but is probably the basis the OP used
to make his decision. And yes, we have established the CD has the authority to make that decision.
I agree with some who have said it might depend on what type (size, speed, weight) aircraft the flyer was using.
But, again, no info from the OP on that either.
In the end, the very fact that he felt the need to come here and ask opinions of his actions
tell me he might not be up to being a CD in the first place.
Those are safety guidelines, not rules. Yes, there is a difference.
There are no specific AMA guidelines about sticking a running prop in someones butt. Common sense would say it's a bad idea.