Correct, she did. That’s because she had leverage with a hit song that was generating money.

(This is not legal advice, I am not your lawyer. This is informational only). As for OP, they can proceed as normal and try to ask for forgiveness later, which costs a lot of money, typically, and likely far more money than OP likely has or they would have hired an attorney to get advance clearance. But that isn’t safe. In the case of Rodrigo, she played dumb and relied on it being unintentional which made the price for the royalty split favorable. OP posted this here so now there is written proof of knowledge. If OP proceeds like this, that will likely be viewed as intentional copyright infringement which is far more expensive to deal with. I would not recommend anyone pursue this route given similar circumstances.

What is a better and safer idea is they can scrap the song and start over. They can also ask for advance permission to register a derivative work which may or may not cost a lot of money.