The way she has talked about it, gives me the vibe this is something that pops up from time to time, and the year long wait, all the media attention and the entire situation of Tokyo just finally got to her. She was talking about shaking during the five hour wait from their earlier warm up. She looked off every time she hit the mat. In the qualifiers, warm ups and then her vault. She's clearly dealing with something. Considering this is a woman who has competed with broken toes and kidney stones and survived sexual assault. I am willing to give her the benefit of the doubt. My only slight judgement is, I wish she had told her team earlier, so they could properly prepare.
I hope she can compete in the all around and the apparatus events. But if she can't, she has nothing left to prove.
Disclaimer, the following are mainly my opinions on the situation, I don't profess to be a mental health expert or anything, and obviously I don't know Biles and so I could be totally off in my thoughts
Even though something has been "off" for the past while (maybe even since trials), my guess is that she felt like she could probably push through it (as she so often has before, as you say, with injuries and other pressures she's faced) without compromising the team, and with it being the other girls' first Olympics, she may not have wanted to worry them (was that the right choice, maybe not, but she is just human - not perfect). I think it was mostly in that moment, though, when she did that vault in the Team Event that it forced her to go "woah - whatever's been bothering me/been going on - has just turned dangerous" and she needed to step back and make a decision on what was best for her wellbeing as well as the wellbeing of the team if her headspace had gotten off to that degree.
I've seen so many people online (not necessarily here, but elsewhere) comment how "she should've just pushed through" or "you don't get athletes in football/basketball/baseball/soccer/
insert almost any other sport here that just walk off the field and quit on their team like that" and it's like, well, in those other sports if an athlete isn't in the right headspace but chooses to push through anyway they're not running the risk of breaking their neck if they make a mistake.
I've listened to Nastia in some of the post Team-Event interviews (as well as read some thoughts from other gymnasts online) and most agree watching that vault - where she was supposed to do a 2 1/2 twist, did only a 1 1/2 and with that landing - it's clear that she got lost in the air/lost her air-sense/awareness (Nastia said it's sometimes referred to as having a case of the "twisties"). That it happens to a lot of gymnasts at one point or another, but when it happens at the Elite level - with the types of tricks that someone of Simone's caliber are able to throw down under normal circumstances - it can be incredibly dangerous to continue/try to push through it. The better option is to step back, assess what's going on mentally, work with yourself as well as your coaches and trainers to see if the mental block can be worked through so that serious - even life altering/permanent - injury can be avoided.