"Does the fact she became involved with someone mean she should be forced to quit or accept no promotions?"
This is why relationships with superiors, even indirect ones, are a bad idea. Conflict of interest policies require avoiding even the appearance of a conflict. Contracts for example can't go to relatives of senior govt officials in a position to influence decisions even if the relative has the best offer.
If this person's career path is hampered by her relationship its sort of their fault. You can never know whether promo decisions are completely objective and its unreasonable to ask people to figure it out.
So, "yes", maybe she needs to look for work elsewhere? Unfair, perhaps.