Actually, you're supposed to start the squat by descending straight down, breaking at the knees and hips simultaneously, with the knees ending up about an inch in front of the toes for people of average anthropometry. Have you even read the book?
The lady's problem is that the bar is in the wrong place for the way she's trying to squat, her head position is interfering with balance and hip drive, and she needs to get her toes and knees out more. Yes, she is having problems sitting back at the right point in the movement, i.e. not at the very beginning, but IMO that is a symptom of the other issues I have identified. One could reasonably make an argument that it's easier to hit the problem the other way and cue her to sit back at the right point in the movement, i.e. not at the very beginning and see whether that fixes the above issues. It's a matter of what works better for the individual trainee, and I personally think it's better in cases of people with underdeveloped kinesthetic sense to give concrete, discrete corrections than to cue vaguer, more systemic corrections like "sit back more" which work better for natural athletes and people with more highly developed kinesthetic sense.
But what definitely does not work is teaching her to squat as though she is doing a very wide-stance, very low-bar powerlifting-style squat in which the goal is to keep shins vertical when what she is doing is a bastardized high-bar squat and what she ultimately wants to do is the low-bar squat the way Rip teaches it.