Turning this around, would your 19 year old daughter feel comfortable if her male relatives wore thong speedos? I expect not. And not because she’d be ogling, but because it would be unusual and therefore eye catching.
There are boundaries with family when it comes to nudity. Separately, women are rightly very aware of not shaming girls and young women about their bodies and what they wear, which is all getting mixed into this situation.
Your daughter can choose what she wears. But nudity being inappropriate with family is a fact of life. So it will probably be uncomfortable for everyone, including her. But that is her choice.
Extended family aren’t wrong to feel uncomfortable. Your daughter isn’t wrong to choose to wear what she wants, she is prioritising her wants above social norms, as that appears to be her value system.
I don’t think it’s a choice of one side of the debate being correct, both sides views on this are valid.
When I was your daughter’s age, I would have had the same attitude as her. Now in my 30s, I would prioritise social norms, because my values have changed.