Under Minnesota law she no longer held any title to the property or even had a TAX obligation anymore.
From my reading of the court decision, the Minnesota statute says she effectively forfeited the property in exchange for a cancelation of the tax obligation. It's not the court's problem that she didn't take into account the value of the property.
“Under Minnesota law she no longer held any title to the property or even had a TAX obligation anymore.”
That is not in question. What is in question is the constitutionality of the law that allows taking of her equity.