I can assure that is not what would happen if this is done correctly.
The problem is, you described it in a way that makes it hard to 'do correctly.'
I do agree that earning the horses general trust should be one of the first things, but you made it seem like you can earn trust without earning respect. Trust and respect have to go hand in hand.
By saying that you would watch the horse's body language and retreat if you saw any signs of bucking, you are enforcing the idea in the horse's mind that he or she is in the lead. It's not exactly the same situation, but think about it this way: if you are out hiking, and you come across some predatory animal, such as a cougar or a bear or a pack of wolves, it is usually a better idea to throw out your arms and legs, and become 'bigger' and 'meaner.' If you give that predatory animal the lee-way and start to retreat, or even worse, start to run, you might as well have a big "Free Hamburger" sign on the back of your shirt. It's going to chase you, and very likely eat you. So in the world of horses, backing down right before s/he bucks or attacks is like saying "I'm paying very close attention to you, and I realized I've just pissed you off, so now I'm going to back away because I'm afraid of you and you are bigger and meaner and stronger than me."
It would be more appropriate to back off when she is showing *good* signs, not bad signs. Like they say, "end every lesson on a good note," this should be ended on a good note, too. If she acts like she's going to buck, or charge, she needs to be shown that that is not acceptable, typically by making *her* move away. If she shows interest, moves a bit closer, keeps an ear cocked toward you, or even just lets you get a step closer than the day before without running off or attacking, that's where you end the lesson. That's where you back off.
To the OP: In the round pen, for the first few days, aye, don't ask her to do anything. She does, apparently, seem to have developed some fear of it. If most of the 'training' she received was in the round pen, she has every right to be afraid. To her, being in a round pen could be synonymous to being beaten. Give her some sort of food in the round pen, maybe a handful of grain in a bucket or a flake of hay. Leave it for her at the other end of the pen, away from the gate. She has to be able to think of the round pen as a safe place.
When you start working with her, keep in mind that she should never turn her butt to you. She should always turn *into* the circle and not change direction (when you ask for a change of direction, of course) by turning her butt to you and her head to the fence. Putting a lunge line on her can help with this, you just have to give it a good bump any time she starts to pay attention to what is going on outside the pen. Something to watch for is when she puts her head down, makes a chewing motion with her mouth, and keeps an ear cocked to you. This is when you can ease up, ask her to come in toward you (at a walk, of course!) because this is when she is saying "Ok, got the point. You have my attention, and you are obviously a better place to be than out here, because out here I have to keep moving."
Also, never let her stop by the gate. The gate is of no concern when lunging. Ask her to stop in random locations. Also, incorporating words when leading her can help in the lunging process, too.
With my gelding, the first thing I taught him was that when I say "Walk" and give a tug on the lead, he needs to walk with me. Then I taught him that "Woah" means stop, "Easy" means slow down, "back up" obviously means back up. I carried them over to the lunging, and now when I say "woah" even when he's cantering around the pen, he throws his back legs under him and slides to a stop, and "easy" tells him to take his canter down to a trot, and saying "trot" takes him down to a trot, and telling him to go back into a canter will take him there, too. I hardly have need of a whip at all, though I do carry one to give him some encouragement to listen when he doesn't want to, in which all I do slap the ground and progressively get closer until he moves.
At first, he wouldn't want to move away from me when I asked him to, and if I'd gotten close and he still wasn't moving, I increased the pressure by tapping him with the whip, and every three or four taps, making it a bit harder. He would move off within a second or two, didn't want to stick around for that.
Anyways. Good luck. I hope to hear that all is going better soon! Ach... this came out much longer than I intended!