Given the advent of cameras on cellphones and people's rude tendency to post embarrassing things online, I think people should be alerted asap to any public vulnerability.
Since GM was the one who noticed, I would have thought she would have been in "rescue" mode - giving you her sweater, whispering for you to go buy a long t-shirt at the gift shop quick, etc. But her own apparent lack of problem-solving skills convinced her that the situation was hopeless and therefore would only cause you mortification. Which is why the road to ehell is paved with good intentions.
If something can be done (including doing the hundred yard dash back to your hotel), I vote for "discreet but informative". If a malfunction cannot be fixed, I am on the fence about whether to say anything. If the person is aware and praying no one else notices I would hate to be the one to burst their bubble - but I cringe when I see someone walking around seemingly blissfully unaware while other people snicker behind their backs.
I think pointing things like that out is risky and maybe unnecessary, but not rude and arguably worth the risk if ultimately helpful.