In a BBC interview, Debbie Engels said the government chose "its allies over protecting its own citizen" by refusing to prosecute Mrs Mugabe, 52, on assault charges.
The Department of International Relations granted Mrs Mugabe diplomatic immunity on 19 August, which meant she could travel back home with her husband, President Robert Mugabe, who was in South Africa for a summit of regional leaders.
"I half-expected it but when you hear the news it still comes as a shock," Ms Engels said.
Mrs Mugabe made headlines after the model laid a complaint with police, accusing the first lady of hitting her with an electrical extension cord on 13 August, almost a week before the first lady was granted immunity.
The alleged assault took place after Mrs Mugabe found the model and some of her friends in a plush hotel room where the first lady's two sons - Robert Mugabe Jr, 23, and Chatunga Bellarmine Mugabe, 20 - live in Johannesburg's affluent Sandton suburb.
According to the young woman, they were guests of the sons, whom they had met the previous day, and they were having drinks when Mrs Mugabe stormed in.
"She hit us with so much hate. Like, I don't understand why she attacked us like that. Until this day my friends and I don't understand why this woman attacked us the way she did for no reason at all," she told me.
This is not the first time that the Mugabe family's behaviour in South Africa has made headlines - in July, the Zimbabwe Independent newspaper reported that the pair had been evicted from a luxury apartment block in the same area after a brawl with some of their guests.
Zimbabwean newspapers reported that their first lady had to make an "emergency" trip to South Africa to find "secure accommodation" for their two sons.
Mr and Mrs Mugabe's sons, who apparently have a taste for the finer things in life in the form of champagne and designer clothes, have a reputation for partying hard.
They are studying in Johannesburg and, according to local papers, the two have not been doing well in their studies, unlike their father, who boasts several university degrees.
Partying is not a crime - though it could incur the wrath of parents, especially if it is overdone.  But beating up someone certainly is, and Ms Engels's lawyers laid a complaint of "assault with intent to do grievous bodily harm" against Mrs Mugabe.
Although the case failed to get to court, Ms Engels' lawyers say the fight is not over.
The rise of Grace Mugabe
The Engels family has an ally in former state prosecutor Gerrie Nel, who secured a murder conviction against disgraced Olympic star Oscar Pistorius after he shot dead his girlfriend, model Reeva Steenkamp, on Valentine's Day 2013.
Now working for the mainly Afrikaner lobby group AfriForum, Mr Nel says he has taken up Ms Engels' case for free and is planning to challenge the government's decision to give Mrs Mugabe diplomatic immunity in court.
"If the review application is successful (and there are very good grounds to believe that such an application will indeed be successful) the doors will be open for the National Prosecuting Authority (NPA) to prosecute Mrs Mugabe," AfriForum said in a statement.
"If the NPA refuses to prosecute, AfriForum's private prosecuting unit, under the leadership of Adv Nel, is ready to go ahead with private prosecution on behalf of Miss Engels," it added.
The South African government's decision has a precedent.
China gave Mrs Mugabe diplomatic immunity in 2009 for allegedly assaulting British photographer Richard Jones.
He said he had suffered cuts and bruises after she punched him while wearing a diamond-studded ring near a luxury hotel in Hong Kong.
Explaining the latest decision, South Africa's International Relations Minister Maite-Nkoana Mashabane said in a statement that she had "agonised" about granting Mrs Mugabe immunity and eventually concluded that it was "warranted".
The minister said she had considered a number of factors.
"These included the imperative to maintain good inter-governmental relations within the Southern African Development Community (Sadc) region, and in particular, between South Africa and Zimbabwe," she said.
"This also has to do with the incident coinciding with South Africa's hosting of the 37th Sadc Summit of Heads of State and Government and legal considerations," the minister added.
But the government's decision can be challenged in court, as was the case with Sudan's President Omar al-Bashir in 2015.
With the backing of the African Union (AU), South Africa refused to execute an arrest warrant for him to stand trial at the International Criminal Court on war crimes, saying he enjoyed diplomatic immunity.
South Africa's judges criticised the decision, saying the government had undermined international law to maintain good relations with the AU.
Still, the criticism has been unrelenting and AfriForum believes it has a strong case because the alleged assault took place while Mrs Mugabe was on a private visit to South Africa.
Diplomatic immunity is covered by the Vienna Convention on Diplomatic Relations, which came into force in 1961.
Its main purpose is to facilitate talks between feuding parties, with the aim of ensuring peace and corporation between governments, without their officials being harassed or arrested, even in times of conflict.
Zimbabwean officials argued that hauling their first lady before a court would lead to tensions in the region, where Mr Mugabe, 93, still commands a great deal of respect.
As they are neighbours, the South African and Zimbabwean governments have close relations over issues like trade and immigration - not to mention the fact that they were "soldiers in arms" during the campaign against white minority rule in the region.
Since the presidency of Nelson Mandela, South Africa has always been of the view that regional peace can only be maintained if Zimbabwe is invited to the dinner table rather than being shunned - an approach that Western nations have preferred because of President Mugabe's human rights record and controversial land reform programme.
Some will argue Ms Engels was a necessary sacrifice to keep calm in the region, a place where it doesn't take much to spark xenophobic tensions.
But the Engels family say they have been denied justice.
The mother of 20-year-old Gabriella Engels, the South African model who has accused Grace Mugabe of assaulting her, says she is disappointed and angry with President Jacob Zuma's government for giving the Zimbabwean first lady diplomatic immunity.