The MW probably missed the signs of distress, but it's not totally her fault, its the fault of the lack of technology available at home.The problem is there is no good way to check for fetal distress due to meconium at home. If the water doesn't break and show the mec, there is no way to know at home, besides knowing mom is post dates, which frequently (but not always) is accompanied by mec. A Doppler is good, and hears the heartbeat, but you can't hear the decels or other very subtle signs of distress with it. You need to be able to see a graph for that, as the ear cannot distinguish the slight difference in beats, or the lack of variability at shows severe distress (there are clips online so you can listen for yourself, if you don't believe me).
Not having a NICU and peds right there for resuscitation is another danger. If you don't catch the mec until the birth, and babe is already severely compromised, then requires transport, it may be too late. At a hospital, you might end up with an induction or emergency CS, but the distress would most likely be caught. I know all hospitals and CNM/Obs are perfect, but standard procedures typically pick up this type of problem. (if not, its considered malpractice!)
HB in general has certain risks, and the risk of less monitoring and no NICU is one of them. I interviewed a HB MW for my upcoming labor, and she was clear about the lack of monitoring, and how it makes a difference for things like mec, abruption and rupture. Only you can know for yourself if this is a risk that is worth it, or if it is outweighed by benefits. *I am not anti HB, and attempted a UC, and am attempting another this year. I just think its important to know the weak points of HB (or UC or the hospital) to make an informed choice. I also attended births with a MW in Mexico for a few years, but am not a professional (was going to be, but decided not too)
What I would want to know about the MW is whether the family was compensated for the loss (money won't bring baby back, but will help pay for a funereal and other related costs, like therapy), and how the mom was treated afterwards. I have 2 dear friends with HB losses, and their MWs turned on them, and were very mean. It was very sad to see a cherished MW act this way, no one expected it. Its always good to Google her, and also see if the state keeps records on their stats (most don't).
Best luck, no matter what you choose!