Well, I don't personally think a citronella collar is in any way abusive. The fact that another dog (and not the puppy) was wearing it, yet they still took the puppy is troublesome.
But she didn't permanently adopt the pup, either. Temporary guardianship.....blech. I wonder if the mentioned training methods/devices in their contract that she was forbidden to use. I doubt it.
I understand the plight of rescue....but really, they need to use some common sense. If rescue wants people to stop buying dogs in pet stores and rescue instead, they need to be reasonable in their requirements for adoption. Some breeders go too far also.
I feel bad for her. I know how hard it is to get a dog to stop nuisance barking. You get stuck between a rock and a hard place...on the one hand, you have local authorities and neighbors breathing down your neck, yet on the other hand, you get blasted for using "devices" like bark collars, which sometimes is the only way to stop the barking.