This procedure is also known as infibulation.
There is, in fact, one instance in which vaginal removal would be ethical and proper medical practice: cancer.
There was no mention of why this woman in the OP had a hysterectomy. But if it was done because of cancer and/or precancerous cells in the vaginal area then there might have been a legitimate reason for what she claimed was done.
And don’t forget, doctors didn’t always tell patients when they had cancer in the old days. And some folks don’t want to admit they had cancer.
Of course, the whole story could be hookum, too
My grandmother joked that she had the babycarriage removed, but they left the playpen. That would have been somewhere around that time, so anecdotally it was not universal.