Either separate the hen being abused but have her still visible to the flock or remove the offender for a few days, or you an by anti feather pecking spray to put on the hen that tastes vile.
I am completely on your side with what you've done and it is justified entirely. If a dog kept getting loose at my house it would have a bullet In it by now, and the owners in court, it is irresponsible and wrong what that owner does, if our lucky the dog might learn that if he goes for you...
Can I just say squatting isn't for you to pick them up, there are two reasons chickens squat
1. They are submissing to a rooster
2. They are scared, if you have ever seen a fox attack the chicken will run and flap but after a while it will simply squat and get taken
With her traumatic background picking her up against her will will put u back a few steps, I would band her this evening, then tomorrow when u band them all keep her in and sit with her and see how close she will allow ur hand, and if she isn't happy there is nothing forcing you to have to pick...
I have a Wyandotte hen that I hatched and she's a bit of a loner, the Roos always try and tread her so she keeps away a bit, but I find the loners the the nicest chickens, they normally prefer human interaction the the end, like my Wyandotte called Winnie. She gets on fine when she is with them...