For employment, without touching EAD, her H1B remains valid (for I9 record, payroll etc.); For POE purpose, you are absolutely right that she is now a 'parolee' not H1B visa holder.
Consequence is (and only matters) when AOS gets denied, for employment she should be still OK and no need to do anything till H1B expires.
But grey is grey, which means nothing is guaranteed.
Consequence is (and only matters) when AOS gets denied, for employment she should be still OK and no need to do anything till H1B expires.
But grey is grey, which means nothing is guaranteed.
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