The teenage swimmer was left devastated after being told she had not done enough to make Team GB.
Her coach, Andi Manley, claims she is the only swimmer in the world not to be selected for the Games despite recording the 'A' qualifying time set by international federation Fina.
She achieved the time at the trials in March, when she finished second behind Stacey Todd - although British Swimming's stiff selection policy demanded she still go faster.
However, if she had repeated that swim at last week's ASA Nationals in Sheffield she would have been on the team. But her winning mark was 0.83 of a second outside the required standard, her coach claiming it was because she'd been told to focus on the European Junior Championship.
British Swimming chief executive David Sparkes said: "Molly has been swimming incredibly well this year but, while she has achieved a great deal, she didn't meet the qualifying standard for the Olympic Games.
"Molly will now focus on the European Junior Championships and US Open and we feel confident she will give her best there and come back with some success.
"We fully understand why Molly challenged the selection policy but again the result shows the selection panel has been consistent and robust in following the policy.
"British Swimming will work with Molly now to ensure she achieves her goals for the rest of the season, and prepares for next year when she will be a strong contender for the World Championship team before looking towards the Commonwealth Games in 2014."