。
She was busy with housework.
Literal
She [topic-は] housework [with-で] was-busy.
X で忙しい = 'busy with X' is the standard pattern: で marks the activity or domain that's keeping one occupied. The same で you see in 仕事で忙しい ('busy with work'), 子育てで忙しい ('busy with child-rearing'), 試験勉強で忙しい ('busy with exam preparation'). Past form 忙しかった makes this a description of a stretch of past time. A short, neutral observation that fits diary entries, narration, or casual conversation.