The call was correct but there was a reason it took the refs so long to make it. Dillingham was doing everything she could to deny Lou the ball down low. Her elbow across the throat was inadvertent and to some degree incidental. The inadvertent aspect is irrelevant when it comes to a flagrant foul but the incidental aspect is relevant, particularly in the low post, where pushing and shoving is common.
The fact that the ball never got to Lou is also relevant because the contact didn't negatively impact a scoring opportunity, so once again the refs come back to was Dillingham's elbow incidental?
The second aspect of a flagrant foul is that it could or does cause injury. The critical element here is Lou's reaction. I say this in great appreciation of her ability in this regard, Lou sells fouls better than anyone in WBB. There's a point when Lou sees that the ball is not going to get to her when she throws back her head, grabs her throat and falls to the floor in pain.
Is Lou really in pain? Maybe. Is Lou giving an "Oscar worthy" performance? Maybe. In the end, with the game's outcome on the line, the refs decided a real injury occurred, which was a difficult decision given the significance of the situation.
I can tell you as a former ref that whether or not it causes injury has nothing to do with whether it is a Flagrant 1 and no good ref would even be thinking of that. Injuries often occur on fouls that are not flagrants, and flagrants usually produce no injury.
I'm not sure if it's been posted, but here is the NCAA rule for a Flagrant 1:
Flagrant 1 personal foul. A flagrant 1 personal foul is a personal foul that is deemed excessive in nature and/or unnecessary, but is not based solely on the severity of the act. Examples include, but are not limited to:
1. Causing excessive contact with an opponent;
2. Contact that is not a legitimate attempt to play the ball or player, specifically designed to stop or keep the clock from starting;
3. Pushing or holding a player from behind to prevent a score;
4. Fouling a player clearly away from the ball who is not directly involved with the play, specifically designed to stop or keep the clock from starting;
5. Contact with a player making a throw-in. This act shall also serve as a team warning for reaching through the boundary (See Rule 4-11.1.g);
6. Illegal contact caused by swinging of an elbow that is deemed excessive or unnecessary but does not rise to the level of a flagrant 2 personal foul (See Rule 4-19.7)
The only one of the six at issue is #1, whether it was "excessive contact". #6 does not apply since that only applies to excessive "swinging" of the elbow, and that did not happen here.