tl:dr: globally, the systemic destruction of any proof acknowledging the existence of Chaos, the Ordo Malleus and the Grey Knights is applied. But for the sake of "cool", it's overlooked by some authors.
It depends on your reference.
According to the first books describing the Warhammer 40k Universe, Rogue Trader ,and Realm of Chaos, any encounter with a Demon or any force from the Warp has to be cleaned by the Inquisition (specifically, the Ordo Malleus). The survivors from Armaggeddon war got deported to a work camp, and sterilized, to die with their secrets. And new settlers were sent to Armaggeddon to replace them, and keep the factories running. When the deportation cannot be done properly, then the inquisitor can use the Exterminatus, to wipe the population directly. It's usually a bacterial bomb, killing any lifeform encountered, and spreading on the whole surface. In some cases (a hive world, or a world with a toxic atmosphere where the inhabitants would wear heavy protections already), more conventional weapons are used.
As for the Space Marines, they are too valuable to get killed, so they were "simply" mind scrubbed, and brought back to battle after some time spent learning how to use a spoon. The Grey Knights can also intervene to help the purification.
And because the Ordo Malleus and the Grey Knights are also proof that the Chaos exist, their existence have to remain a secret too.
In any case, in the early books, any contact with a Demon has to be cleaned by the Inquisition, specifically by the Ordo Malleus (the only named Ordo in those books).
At that time, the Adeptus Sororitas didn't exist, but we can assume they would share the fate of the Space Marines. Mind scrubbed, and re-education. This would explain why, in the book you quote, a sister has some recollections when she sees the Grey Knights.
But then Inquisitor added multiple factions to the inquisitors, the Chaos armies became very popular among the players, the Grey Knights too, and novels multiplied. And Chaos became a "common enemy". For the sake of stories and campaigns, the systemic erasure of any survivor after a chaotic outbreak tends to be overlooked. It can be explained by the fact that the current background is always told from a specific point of view. So maybe the closest inquisitor was surprisingly empathetic, and decided to spare the survivors, or even worse, to glorify the "heroes". Maybe there were no inquisitor in the sector. or maybe the punishment is on its way...
To my knowledge, the old background is still applied, until official sources say otherwise. So as a general rule, the punishment is used. Now, the Galaxy is vast, and each inquisitor can decide of his own rule... (even if this may bring some concerns from his peers, if they ever find out)
Black Library novels are not considered to be "canon". Only stories published in the Codex, the rulebook, and White Dwarf, are materials written by GW writers, and are official. Now, it happens that some elements from the BL, video games or from the RPG, become official. But most of the novels are representing one interpretation of the Universe, by its writer.