Exactly how she gave the images to the LoC, and exactly what the LoC means when it says the images are now in the public domain, will need to be explored in court. If she transferred the copyrights to the LoC, then she has no standing to sue for copyright violation. So she must be saying that she retained the copyrights and only gave an unlimited use license to everyone.
Getty Images needs to show that she transferred the actual copyrights to the LoC and therefore has no standing. That is likely to be a very tough thing to do.
And frankly I'm not sure that it matters. The photographer is righteously pissed off that Getty Images is making profits off of her work when she intended it to be freely given to everyone. And for as long as this trial makes news, Getty Images is being righteously punished as its name gets dragged through the mud, and potential customers start using the LoC and other resources for stock photos. Which is as it should be.
Getty Images best course of action is to settle quickly and quietly and cut its losses. But it may already be too late: it is clear that G.I. was making false claims of copyright ownership, which violates USA Federal law, and must have involved a conspiracy between the executive officers of the corporation. Since they were either doing this knowingly, or were deliberately grossly, criminally, negligent in failing to search for prior copyright before they claimed they held it.
There should be a story along soon about FBI involvement in this case.