Bruce was correct. To understand why, we first need to look at the definition of a provisional ball, which states, it is a ball played under Rule 27-2, for a ball, that may be lost outside a water hazard or may be out of bounds.
That means there are only two situations where you can play a provisional ball. The first is if you think that your ball may be out of bounds. The second is when you think that your ball may be lost, but only if you think it may be lost out of a water hazard. You cannot play a provisional ball for a ball that you think may be lost in a water hazard.
In this situation, if there was a possibility that the ball was lost outside the hazard, a provisional ball could have been played, but it should have been announced and then played from the tee. Rule 27-2 says, a provisional ball must be played before the player goes forward (more than 50 yards) to search for his original ball.
As soon as Tom left the tee and moved forward more that 50 yards, he was no longer entitled to play a provisional ball. For these reasons, when Tom dropped another bal, it was not a provisional ball. It became the ball in play, with a penalty of one stroke. If Tom then found his original ball, it would no longer be the ball in play, so hitting the original ball would have incurred a further penalty of two strokes, as it would be deemed the player had hit a wrong ball.