This is a constructive dismissal. If she was hourly, sure, being on camera makes sense. But if you are salaried and some clown in HR decides that they want to make sure you're working 40 hours but WON'T pay you any overtime or judge you on your output, they're trying to have their cake and eat it too.
The outrage is justified. If it mattered for her job then no AI monitoring would be needed.