She's a baby Factory!
For the flaw, she may very well retain it. Being married with children doesn't end depression. IRL, some people have everything, yet they depress. Otherwise, you may replace it. For example, as a result of her bad pregnancy, she may have been weakened, "gaining" reduced characteristics, or a poor (characteristic). Or she may be Envious of Vibria, or Proud as the wife of the mighty Vulcanus.
As per advancement, as far as I can tell, you're right.
This is problematic for a Companion redcap, as evidenced in the Venditor thread.
This part, IMO, is great "Each season of Service in Redcap duties earns them one Benefit point accrued (or one level towards Redcap Items), plus they gain 5xp relative to their duties, such as in Area Lore or the local Language (this counts as a mix of Practice &/or Exposure)."
This one begins the make redcaps companions better than other companions, while still staying manageable: "A Redcap may pull extra duty and work a third seasons a year if they choose (a season of extra overtime earns no bp, but you get two pawns of vis from the guy you are filling in for plus the 5xp, and 2xp for a reputation as an overachiever)."
And as you noted, as a covenant magus, she's expected to gain even more vis (although Marko noted 12 pawns for masters elsewhere, not 16, so he must have toned it down to 3/year), which is quite unfair to "normal" companions, like Stephanos and Arnau. I really don't care (I have no companion), but as the problem was raised, I think you should be aware of it.
=> Funnily enough, the more unbalancing thing about the Redcap virtue post-game is not the HR, but the side effect of their RAW status as magi