There are several accounts of what exactly led to Fox's departure. Bay has been quoted as saying that Fox made disparaging remarks about him to a trade magazine, after which he made the decision to replace her. Fox refuted these claims, stating that it was actually producer Steven Spielberg who was the sole individual responsible for her character's omission from the script for the third film.
Ultimately, the exact sequence of events is not fully agreed upon between Bay, Spielberg, and Fox. Despite the different statements from those involved, Fox did not reprise her role for Transformers: Dark of the Moon, or any subsequent films in the franchise.