The DQ comes about based on when it is noticed she is not legally equipped for the competition. Walking on the pool deck her suit may have looked fine but when racing it creeped up and in. Every school that is a member of NFHS received the same information at the beginning of the season around how this rule would be handled this year and it was clear, swimmers would be DQ if the are improperly attired.
This is really similar to the wrestler haircut from last year. The rules were explained, warnings given, but they chose a hair covering that did not meet the rules. This girl had other swimsuit options. Either the school could provide a larger suit or she could buy her own. If she is a collegiate level swimmer the team suit is not the only one she owns. I have joked with my wife that I may go to Walmart and buy a "granny panty" suit complete with skirt to give the first girl on my team that gets caught with her suit up her butt.
My team all knows the rule and about 75% of them don't care. So far the officials have let it slide but I know we will run into at least one this year that is going to be a dick about it and then the parents will be in an uproar even though they know about the rule. I should be proactive and stop letting the girls compete in suits that run a fowl of the rule but it is not worth the risk. Being male if I were to recommend swimwear or punish someone for their suit not fitting correctly the metoo movement would be at my door and I just am not up for that fight.