[EdinSumar]

She stuided magic openly (and was a known follower and preacher of Mystra) yet she was never caught by someone with authority. How would a lesser RWA treat her for example?

To be fair, this is probably only because it never came to the attention of anyone with real authority, which is always a possibility on NWN servers. In Thay, openly preaching about Mystra and spreading magical knowledge under the noses of Red Wizards gets you killed, simple as that, but it's impossible to simulate the legal system of a whole country all the time.

To answer your question, I think they would excuse themselves rather quickly, tell a more powerful Red Wizard, and then watch her get killed or enslaved.

There -are- other spellcasting NPCs, yes, but you need to take into account that the NPCs you see on the server are not every single person in Thay. Bezantur alone has around 140,000 inhabitants as far as I remember, and those few people who are not Red Wizards yet know magic are a very small minority, not "many people" at all, who are living a dangerous life, yet for some reason is able to keep it up, due to allies, luck or skill. They are not still alive because they openly preached the word of Mystra or openly studied magic, then they would be dead.