책을읽었어요 reports a past activity. 책을읽고있었어요 presents reading as in progress at that moment; it does not by itself say when it ended.
Action
In progress in the past
읽다
읽고있었어요.
기다리다
기다리고있었어요.
공부하다
공부하고있었어요.
Connect the two with 책을읽고있을때전화가왔어요. Here 있을때 locates the call during the reading; it is not a future appointment. The overall sentence describes the past.