Anyway: it’s still moot. What she did, even based on your account, is not illegal.
It’s not illegal to apply for TN, period. If the application is rejected, that doesn’t make the application retroactively illegal.
It’s not even illegal for a Canadian to apply for a TN at the border crossing, have their application rejected, and keep driving right into the US. I know this because it happened to me. As Canadians don’t need work permits to enter the US, entering the country wasn’t the question - only working in it.
Unless she’d previously been given paperwork that had banned her from entry to the US - and she hadn’t been - there was nothing illegal with reapplying. She was told to reapply.
Whether she did anything “wrong” is debatable, but whether she did anything illegal isn’t.