It seems many believe something happened to all Time Lords everywhere when it happened on Gallifrey. I've never understood that interpretation. I believe it only happened on Gallifrey, and anyone who wasn't on Gallifrey, wasn't Time Locked, Erased, whatever. So, If Romana was still in E-Space, she would be unaffected (Other than what happened to her Home Planet). If the Doctor went to the time and place where he dumped Susan off, she'd still be there (If she didn't run home to Gallifrey to participate in the Time War).
The only thing to understand is that it works in whatever way the story requires. If the story requires all the Time Lords to be dead, then they're all dead, temporal logic be damned. At most, their past is "time-locked" so the Doctor can't go back and rescue them, or the Laws of Time forbid him from crossing their past time streams and altering their destinies. But if the story demands that a given Time Lord or Lady managed to survive, then a justification for that survival will be made up, no matter how bizarre or inconsistent it is.