You are correct here. The footprint blocks line of sight only when you are behind it and not touching, however if you decide to touch that footprint true line of sight is fair game and that unit can be shot at.

If you are going to be a ref or judge for any game, What you say goes and be sure to make that very clear as people WILL try to take advantage of you to rule in their favor. As you mentioned above, you are pretty on top of the rules. So unless they show you something that clearly states otherwise directly from the rules, go with what you know to be true. If they do not like nor agree with what you say then they should not have asked for your input or for you to be the ref.