I don't know about you, but I often accidentally watch entire shows I'm not interested in, just like she does...
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This is the thing; many fictional movies/shows have this at the start (Blair Witch as you mention, Fargo, many others) and then often have a bit at the end explaining that characters/situations have been made-up.
However, the fact is, it does state "This is a true story" and that can be very misleading or confusing.
Still, he didn't name her or specifically say it was about her so having a fictional character go to court isn't the same as making a biopic with real names and saying "Fiona went to court and then prison".
As you say, she's very unpleasant or, at least, comes across that way in her myriad recent facebook rants.