May/2000 Cronin Memo states "...under H1 visa...". For those who has a valid multi-year-multi-entry H1 visa (e.g., Japanese, European) it is fine. But for KatieMaMa, there might be a problem: Will she get H1 visa in Beijing? When she is interviewed for the visa and if the consulate officer asks her if she have filed for immigration, she should say "yes" or "no"? If she says "yes", she will be immediately disqualified for H1 visa and subject to Consular Process. And if she says "no", apparently she is lying.
The right choice for her is apply AP before she goes back to China. Because she is H-1B visa holder, even if her I-140 is denied, she still can maintain H-1B visa in the U.S.