The absence of “and” has nothing to do with simplictiy and inserting it is not only not justified, but would change the meaning of the sentence entirely. It would imply that 1. she is afraid of the situations, and 2. the situations are beyond her capabilities. The sense of the sentence is such that neither of these is true.
The situations are not what she fears, they are what she faces:
She still faces situations…
“that she fears are beyond her capabilities” is an adjectival clause qualifying situations. This is equivalent to:
the situations are ones that she fears are beyond her capabilities
Now one can see that she does not fear the situations, but she fears the property or quality of the situations:
she fears that the situations she faces are beyond her capabilities
Note also that the sentence leaves the same doubt that she has over whether or not the situations she faces are beyond her capabilities. She only fears this, a fear which may be unjustified — the sentence does not say. Hence it is incorrect to say — as you do — that the situations are beyond her capabilities.