She stepped on the inside line. That means disqualification. People who are disqualified don't advance. End of story.
And, as someone pointed out above: she did not "break" an American record; she bettered the American-record time, but did not do so legally.
[Okay, one small caveat: had she somehow been *pushed* onto the inside line of her lane--say that someone in an outside lane had taken a bizarre fall--it's possible that she could advance to the next round. It's even possible, though less likely, that the time she ran would be accorded new-record status. (Officials always have the option to make calls based on "fairness.")
[But the chances of a freak-fall scenario like that are pretty slim.]