I mean a former student definitely can be a substitute teacher

And per the school’s own admission, teachers recognized her as a former student and didn’t say anything at the time.

If you're drawing that from:

Since our first communication, our initial investigation determined that this individual involved was a former student recognized by staff. [emphasis mine] She was not a substitute teacher. We did involve our Milwaukee Police Department school resource officers (SROs) the day that this occurred. The district’s Title IX coordinator was also notified. In addition to any police actions resulting from this situation, the district is continuing with its own investigation.

It seems extremely clear that what the letter is saying isn't that the staff saw her impersonating a substitute and looked the other way; it's that once the students reported her, staff who worked there were able to identify her as a former student.

If this isn't what you were talking about and I'm missing something, I apologize.