The detail here is that she applied for settled status, which would have granted her leave to remain in (and hence to enter) the country, but it was refused. Pending her appeal she was temporarily granted the right to work in the UK, but she was not temporarily granted the right to remain, it seems - or at least that's what the Home Office position implies.
It seems like an oversight to me: the application for settled status allows you to leave for up to 6 months at a time and come back and still qualify; if you can still work while you're appealing a decision, it would make sense to temporarily allow the person into the country.