My take, and I could be wrong:
Rule 8-5-2b applies, and a safety would be the call when the penalty is declined. (It says muff, bat, or illegal kick, so I presume the same would apply to an illegal bat.) As a foul during a loose ball following a running play, penalties by K in this case would be enforced from the end of the run if accepted, so half the distance from the 1 for an illegal bat and an untimed down. Or decline the penalty and take the safety.
With zeros on the clock before halftime, take the chance to score a touchdown.