Pretty strange logic. You forgot the obvious possibility: they asked about her past (which is on record, so CSIS would have found it easily enough anyway), she gave forthright answers, and they decided to appoint her GG anyway!

Note that both the Conservatives and the NDP say she is still an excellent appointment, despite her past, so that means they would have come to the same conclusion, even knowing what they know now. It's just politics as usual.