I think you are right. She will be on AOS once she uses AP to return. So if her hu*****and's I-140 is denied, she will be out of the status.
For H-1/H-4 holders, one can keep dual status (AOS and H1/H-4) after they use AP to return, as long as they work for the same employer. So the risk is much lower: if I-140 denied, they can still renew H-1/H-4.