The words 'flag, standard, colors, or ensign', as used herein, shall include any flag, standard, colors, ensign, or any picture or representation of either, or of any part or parts of either, made of any substance or represented on any substance, of any size evidently purporting to be either of said flag, standard, colors, or ensign of the United States of America or a picture or a representation of either, upon which shall be shown the colors, the stars and the stripes, in any number of either thereof, or of any part or parts of either, by which the average person seeing the same without deliberation may believe the same to represent the flag, colors, standard, or ensign of the United States of America.

You'll notice, it's right under the section titled 3. Use of flag for advertising purposes; mutilation of flag She's not advertising anything. Further, it only says that those count as a flag for that context, not all contexts.

No part of the flag should ever be used as a costume or athletic uniform.

She's not using 'part of a flag' she's using flag patterns.