Yes, that is correct. The sentence "While Cindy and Patricia were walking down the hall, she noticed a sign on the teacher's door" introduces ambiguity because the pronoun "she" could refer to either Cindy or Patricia. To improve clarity, you could revise the sentence to specify which person noticed the sign, such as:
"While Cindy and Patricia were walking down the hall, Cindy noticed a sign on the teacher's door."
or
"While Cindy and Patricia were walking down the hall, Patricia noticed a sign on the teacher's door."
This way, it is clear who is being referred to by the pronoun.