The passage in question deals with a man who is fighting "with his brother" (meaning this is not an enemy, this is not a fight "to the death"). The wife steps in and grab's the testicles of the man fighting her husband. Her intent is to maim or kill the man -- who otherwise was in no physical danger of his life, or the lives of future children he might father who will never be born thanks to her actions.
She is, in a sense, murdering those future generations if not the man himself.
IF the woman will not let go, then it may be necessary to do whatever is physically necessary to stop her from maiming or killing the man in question. If she lets go she doesn't lose her hand.
This is NOT a legal issue -- it is an act of passion issue of what needs to be done during the actual altercation. It is a question of saving the man's life (and those of his future children) over saving her limb (her arm). Life always takes precedence over anything else.
Now -- when it comes to the idea of "an eye for an eye" we are on a different topic (even though both issues are discussed in
Sh'mot / Exodus chapter 21). We know for a fact that the Torah is not saying "if one man blinds another, blind him as well." We know this because the Torah TELLS us what the legal system requires for various situations. Rashi writes: If [a person] blinds his neighbor’s eye, he must give him the value of his eye, [which is] how much his price to be sold in the marketplace has decreased [without the eye]. So is the meaning of all of them [i.e., all the injuries enumerated in the following verses], but not the actual amputation of a limb, as our Rabbis interpreted it in the chapter entitled הַחוֹבֵל, he who assaults. -[
Tractate Baba Kama 83b, 84a]For example, if a man accidentally kills another man - if "an eye for an eye" were literal as so many Christians assume -- then how would they explain that we are told if a man accidentally kills another the courts must send the killer to a refugee city? The killer is NOT put to death. He is banished. This is found in
Bamidbar / Numbers 35:25.