She's definitely horrified, and now being called out on it she realizes that she's not going to be allowed to bury her head in the sand and ignore it.
I think we also might be witnessing, first hand, a habitual liar attempting to convince themselves of their own lies. Her Yeah, So What? mantra is on repeat online, in her head, she's probably muttering it to herself out loud, and will continue to do so until she's well and truly indoctrinated herself into believing that everything is in fact fine and her world isn't going up in flames around her after she lit the match and threw it onto the couch herself.
Which would be a whole lot funnier if her fiance didn't have kids. God, I hope they're old enough they don't actually have to rely on Jamie for anything serious.