She has a contract and a receipt for that and she paid for it....now it is on LH to provide the service....

If she has the patience and inclination to go to court, this could indeed result in a sweeping result where airlines will have to update their cancellation software. Currently it is very very very easy to cancel by someone who isn't you.

But short term - I'd just be glad they rebooked her to next day - its not worth the hassle. At most do a chargeback from your creditcard on the change fee and hope its refunded.