But my question is only concerned about her getting the first one wrong. In this case she has 100% failed the test so why continue? Please answer.
I don't know how to explain it any simpler. If you stop it when she's wrong, then by definition you do not stop it when she's right. This is the same thing as saying, "Yes. Miss Claimant, you were correct in that trial." In your ridiculous scenario with having just two people, that kind of feedback is extremely risky.
What's the advantage of stopping it early? Saving a little time in a day you've already allotted the damned test anyway? What else? Or is it your desperate need to have just one of your suggestions accepted as a good idea?