At the end of the "Equipment" section (Rule 3) it says that ASA (the umpire is a representative of ASA) may remove any equipment "changes the character of the game". I think that this qualifies...
Rules Supplement #2: Ball Rotation Prodedure...notes that unplayable balls are to be removed from the game.
Playability/damage to the ball is up to umpire judgment. There's no list of things that spells out when a ball is good, bad, or unplayable. I would hope that any reasonable umpire would toss this one!