Cancelled visa
Her previous residence visa has been ended, and she is inside the UAE on a limited grace period.
A cancelled visa usually means a previous employment has finished and the visa attached to it has been closed. UAE rules allow a grace period during which she can remain in the country and arrange a new sponsorship; the length depends on the case and on current rules.
It is a common and entirely legitimate status. What it is not is open-ended — the grace period runs whether or not anybody is doing anything about it.
Why it matters
If you are considering someone on a cancelled visa, ask when the grace period ends and start the Tadbeer process straight away. Time is the constraint, not eligibility.
See also
This is general information, not legal advice, and the rules change. Confirm anything you intend to act on with a licensed Tadbeer centre or with MOHRE.