The Rebbetzin did dress tznius, and I would like to point out that saying loshon hara (in this case motze shemra) about someone who specifically tried to stay out of the public eye is certainly assur, and is in no way letoieles.
Think about going to the Ohel to ask mechila.
She was tznius in the original sense of the word – avoiding publicity and exemplifying kvoda bas melech pnima.