2001 is long before Poland joined the EU so she must have come in under domestic law. What was her immigration status at that date?
I would have expected her to come in under a spouse visa, which would have given her the right to work, and to apply for indefinite leave to remain after one or two years (can't remember when the law changed). The ref to right to work for 12 months in 2005 is confusing - it sugggests the worker registration scheme. But if she had indefinite leave the WRS is irrelevant to her.
The key must lie in her status before 1.5.2004, and I simply can't deduce that from the information. Have you seen her passport? If she had ILR before 1.5.2004, nothing except 2 yrs absence abroad can take that away from her, and she is likely anyway to have lived legally in the UK for 5 years and be a qualifying person on that ground too. But at present I can't understand what has happened. Neither, I imagine, can the decision maker.
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