This is only partially correct. If she did visa with agent, she won't be on overstay since she's on "under consideration" atm. The passport is just with them somewhere. Either at immigration in a cabinet, or in some kind of room with a third party. But you are correct that if agent is bad, she is fuck. Choosing a good agent do matter.
Repeating twice won't change the answer. Yes, they do. They have hundred of passport in cabinet waiting for under consideration time to finish. I've seen this with my own two eyes when I went with lawyer a few years ago.
I don't know how "I've never heard of a non-Thai foreign national spending the night there" is even an argument. Be humble about what you don't know instead of trying to be a "know it all". No need to shove to people throat your personal preferences, OP asked about staying at that border. He didn't ask you to create a 2 days trip for him.
And fyi, if you have dogs or cats they won't even ask for health certificate or wtv at O'Smach border. It's a very chill and easy border. Yes, 11 guesthouses seems about right. Probably a bit more not on google.
I've been to O'Smach a few time with my wife and our dogs. Nothing weird in spending the night there for a border bounce. I always see other foreigners went I do it. It's not crowded so it's a great option.