"Her application was refused in June on the grounds she did not provide sufficient evidence, but she had asked for an administrative review of the decision and had a certificate of application (CoA) from the Home Office. It states “you can work in the UK until you receive a decision on your application to the EU settlement scheme”."
"The Border Force refused entry on the grounds that her “application for EUSS [EU settlement scheme] has been refused” [...]"
Could be just overlapping on the timing, that she got the decision in her post box in the UK, while she was abroad in Spain. Would be the simplest explanation for the situation.