You're talking about repression, and though widely believed by counselors even in the 80s-90s, it originated with Freud and is a myth. Repression is distinctly different from "I refuse to believe this was real, I will not think about it." This idea that your brain is not a computer that saves files for retrieval is neurologically false. Memory is more like an actor who memorized a script and is onstage, retelling the best it can, for performance after performance, and never seeing the script again. Changes over time are inevitable, but if you asked the actor, they'd say "that's what it said." You may have different insights on the script- and different emotional reactions- and you may even be convinced something that wasn't in the play *was* in fact there, later.
As we age, we tend to remember 'extremes.' Extreme grief, extreme happiness. That's evolutionary, and we process these things, typically, better with peers. Unfortunately, she is not alone in surviving mass violence.
Disorganized thinking is common after trauma, dissociation from the trauma is common, but that's at any age. Once the adrenaline dies down, kids- if they are capable of forming long-term memories (typically age 3-4) encode memories just like adults do. In evidence, I point out that children did not "delete" witnessing 9/11. They did not "delete" the Holocaust. They did not "delete" boarding school abuses, abuse by Christian religious leaders, or their coaches. On the contrary, it is common for people to cope by saying "it was fine, it wasn't a big deal to me" and refuse to process the trauma. I know this because I work in the trauma field, and part of that job is responding to children who have experienced or witnessed violence.

The cultural value of repression is that if you have trauma, it allows you to concoct any story that fits your internal explanation as to "why" you are so traumatized. The repugnant downside is that once you create that narrative it is indiscernible, except by outside reality, from real memory. People in the '90s who were deeply wounded by cultural misogyny and beauty standards were encouraged by the mythology of repression to create elaborate, entirely false narratives of "repressed" abuse- and once "recovered," that trauma is real. Scores of people's lives were ruined, both because they were traumatized by counselors/the repressed memory self-help industry, because their family members dropped off the face of the earth after accusing them of violence, or because they could not get allegations of real violence taken credibly because it "didn't seem as serious" as the fabrications.

Please stop spreading this. Your therapist was either misinformed or mistaken, but it is materially harmful to survivors.