Was her decision to refuse the young man who betrayed her a sound one, and what is the legitimate Shar'i opinion on this matter, especially given that she is suffering from psychological torment?

There is no sin upon you for refusing the suitor, because the engagement is not a binding contract. The husband should be a man of good character and religious commitment, for if he loves you, he will honor you, and if he does not love you, he will not wrong you. We advise you to accept the suitor if he is a man of religious commitment and good character, and do not worry about his engagement to another woman, as that is permissible for him. However, if he is not satisfactory in his religious commitment and character, we do not advise you to accept him. You must cut off any relationship with him (calls, meetings) that is not permissible in Islam and repent to Allah.