Since you've explicitly asked for advice, the only way to assess remote employees is by what they're delivering. If you employ them for 40 hours a week, but they can deliver what you're asking in 5 and still be responsive when needed, is there really a problem?

If they're also doing another job on the side, but it isn't impacting their delivery of the work you're asking for, that shouldn't be a problem. By doing away with a (largely unenforceable) policy of no moonlighting you also avoid the problem of having to fire people for breaching it.

I'm borderline on whether Alice here was even at fault. She is likely in breach of her contract for several other things, I assume there's a routine NDA in place which probably means that she shouldn't be sharing confidential company information with outside parties, but if not and she was getting work delivered is it really a problem if she did so by being good at project management rather than software development?