The women's time trial was won by Australia's Katrin Garfoot while Lowther's England teammate Hayley Simmonds took bronze.
Team England chef de mission Sarah Winckless spoke to Lowther on Tuesday morning to apologise.
"I thought we were in a really strong position, that we had done what we were meant to do for the team, but it became clear yesterday it was not the case".
The extraordinary administrative error was not spotted until it was too late, despite "seven or eight" layers of checks where the mistake could have been identified.
"It's more than embarrassing", said Winckless, an Olympic rowing medallist.
Mollie, the youngest player in the England squad who now plays for Leicester Riders and the Great Britain Women's team, is a third-year student at Loughborough University, where she is studying sports design and technology. "It's hugely disappointing and she has my sympathies and honest apologies".
Lowther had been expected to perform well after missing out on several important races this season with the Commonwealth Games her primary target.