I believe the correct ruling is that the batter would be awarded 2B. On ball 4, he is entitled to 1B without liability of being put, though the ball is still live. Once the pitched ball enters the dugout (dead ball territory), all runners would be awarded one base from the base occupied at the time of the pitch. So in this particular scenario, even though the batter had not actually reached 1B at the time the pitched ball entered the dead ball territory, I believe he would be awarded 2B.
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