It is so wrong, but I think you are right.
First of all, there are other programs that would be of more benefit to her. This is a program where she would not be in a Spanish high school. She would be studying together with other US students on this program. Of course, living with the Spanish host family will help, but she would be better off doing an exchange program, whether formal or informal, where she attends a Spanish high school with Spanish teenagers.
If she’s planning on applying to highly competitive schools, I do think that compiling a record in junior year is highly relevant. Yet a high school junior year in a foreign country, speaking a foreign language, is tremendously valuable. Speaking English with other US students? Not so much…
Three other options: Spend the entire summer living in Spain with a Spanish family, speaking Spanish, and do junior year in her regular school. Maybe go back again for the entire summer before senior year, too. Or do a gap year abroad between high school and college (less desirable, because the difference in foreign language acquisition ability between age 16 vs age 18 is significant). Or take a year off between 10th and 11th grade, going to a foreign country for a year of school there in a foreign school and living with a foreign host family, and come back and do 11th and 12th in the US, maybe going back for the summers to keep her language skill up.
If she’s planning on tippy-top private schools, I think that they would give individual consideration to each application, and not dismiss her application because she doesn’t have AP classes in 11th grade, especially if she had been a straight A student in all honors classes, plus has an extremely high SAT/ACT, plus gets a 5 on the Spanish AP exam in May of her junior year, plus registers for a challenging load of all AP classes in senior year. But I do think that it might be a problem to overcome, when compared to a kid who has a bunch of high grades in AP classes from junior year.
The best option would be for her to have both, by spending the summers in Spain, living with a Spanish speaking family, for the summers before 11th and 12th grades, so that she’d have both fluency in Spanish, and a junior year academic record.
As for the SYA program vs an AFS-exchange program, I can tell you that my kid who is applying now for jobs is considered qualified because kid didn’t do US programs in the foreign country, but instead lived and studied entirely in the foreign language. Didn’t speak a word of English while kid was there. Employer was ONLY interested in kid because of that. Said that those who had done US sponsored “Let’s all go to foreign country and study there together” type programs could not perform in the target language.