I absolutely love this part of this movie. When Flynn cuts her hair off, he cuts it off - the’s barely even a bob left. And seeing how her self-worth and value had been determined by her hair for eighteen years, I’m sure she felt frightened that she wouldn’t be as valuable to Flynn; to anyone. She was always just her hair. But by cutting it all off, Flynn liberates her from having to feel like a possession, and that is why it is so important she finds that relationship with Flynn, to change the view she had of herself with Mother Gothel.