I think you caught a break from your instructor:
2.2.2.8 Required Dive Skills and Drills
2.2.2.8 (A) Required Dive Skills and Drills for a GUE Fundamentals - Recreational Rating
a. Must be able to swim at least 300 yds/275 m in less than 14 minutes without stopping.
This test should be conducted in a swimsuit and, where necessary, appropriate thermal
protection.
b. Must be able to swim a distance of at least 50 ft/15 m on a breath hold while submerged.
I suppose it's possible there is some instructor variation, but she was pretty unequivocal about it... I asked for tips prior to class because I made the same assumption based on reading the Standards, and she was very quick to say that it was ok to float up.
Quote from her text: "The swim is breath hold and distance - so theoretically you do not have to be under water the full distance. At the surface and on the same breath hold is perfectly fine."
Friends who did GUE classes with different instructors recently had the same experience - staying fully submerged was not required for them either in Fundies or Cave 1 (so that's been the interpretation from three different instructors in the past two years).
I 100% agree that the Standards need to be clarified, one way or the other - it's uncharacteristically open to interpretation.
Long story short, it's the typical GUE answer: ask your instructor (but if you're debating whether to pursue GUE, don't let breath hold swim test anxiety hold you back)