I've always felt that Kelli was uncharacteristically easy on Holly, i.e., an average skilled dancer would have been fired without hesitation!! Goodness, Holly lied through her teeth to Kelli saying initially "I didn't...I'm not...."Whaaa?" then on to "I'm sorry; it was wrong & immature of me; it won't happen again..,". So possibly after-the-fact Kelli was told about Holly's snarky comment "Oh well, it was fun!", or, Kelly told Charlotte and Charlotte said "This is a privilege...on my team! Let her go!" Because Kelly was going to keep her on the team initially (due to her exceptional dance skills, I believe).