Globaliser
The 32kg limit does not mean that a bag weighing 32.1kg should be rejected, merely that the passenger will be billed for the excess weight - and it's quite a hefty penalty. However, it is up to the person in check-in to determine whether or not an overweight charge should be enforced, and they are encouraged (in most places) to adopt common sense. Being 2.2kg over the limit is borderline, and circumstances might very well dictate that an overweight penalty will not be enforced, i.e. if the passenger has "Gold" or similar FF status.
I've been slightly over the 30kg limit (which is standard outside the US for C-class or "Gold" card holders) on a few occasions and never been fined. Yes, "Gold" status has it's perks whether we like it or not.
The correct procedure, as BEagle pointed out, is to attach a HEA lable to the bag. However, in most places HEA tags are only required for bags exceeding 50kg in weight. Any sensible person working with bags will never assume a bag to be either light or heavy; they'll give it a small yank to test the waters. Using full force to lift a 5kg bag will have the same detrimental effect as using too little force in lifting a 35kg ditto - a damaged back.
In the end, the lady in question screwed up - but I'm sure she'll find a way to sue somebody for her incompetence.
PAXBoy
1: Makes no difference
2: No such thing as a "TSA" limit. Carriers set the limits, as described above
3: No such thing
4: Not unless they want to loose money; carriers make a quite nice profit from carrying excess-weight baggage.