I guess it depends on if that particular "moment in time" is what the AP wants to capture. Fake "reenactments" and staged photo events of "tragedies" in the middle east that are used to support false allegations? Yep, those are apparently capture just the types of "moments in time" that the AP is OK with.
But this example is clearly out of bounds! ... Seriously, have any of you ever seen the standard Army photo portrait? It's a picture of a Soldier in uniform, from mid-chest on up, in front of an American flag. Most individuals in leadership positions need to have one taken for publication purposes. If she hadn't had the chance to have one of these taken, clearly the intent was to simulate that it was a standard "official" portrait.
Maybe if they had included a few live people draped with sheets to simulate corpses, or perhaps a live person being carried as though he were dead in the background the AP would have been OK with it. But a fake flag? Oh, no. That's right out.