Hang on. There's nowhere she says she was only looking after her mil for financial gain. If she was I guess she'd have given up by now, probably a long time ago.
She has loss of earning for teaching for 3 years, her dh is commuting to work (costing transport cost) and staying away (presumably paying rent in London). That alone is probably going to be in the region of at least £100K.
She has spent three years caring for her MIL-dementia is hard. You need to be on call 24/7, because dementia sufferers are just as likely to wake at night and do something dangerous as during the day.
That's saved her mil/the inheritance the cost of a care home, which is roughly £30K a year. That's roughly another £100K over three years.
At the same time they've been doing up the house. Maybe some people love doing that sort of thing, but I hate it. Again, if they'd got someone in it would have cost them.
She's not saying they should keep the house outright, she's saying a larger part.
However I think that sort of thing should probably be discussed, distasteful though it feels, before it starts. It would have been perfectly reasonable to say that they needed to have enough to get a similar house to the one they'd sold in the same place.
My parents know someone who did exactly the same just before the 80s housing boom. They were caring for 7 years. Hving had a house where they wanted, the size they wanted and sold it to care for parents in their home, 7 years later they found that their 1/3 of the inheritance and what they'd saved went nowhere near even looking at being able to buy a house. So from having a house they'd nearly paid off the morgage, they couldn't get a morgage to cover a smaller house.