I have been an admissions interviewer, at both undergrad and graduate level, for both Oxford and Cambridge, though I'm not involved in admissions at either at the moment. In my experience, performance at interview and in the tests which are part of the admissions process (whether centralised, as for law, medicine etc, or set at college level) weigh much more heavily than any other factors, including choice and number of A level subject (provided basic criteria are met), and certainly much more than things like the personal statement and extracurricular activities which are - in my experience - of very little relevance except as useful cues for a gentle starter question.
I agree that three A levels is fine and would attract no comment with the possible exceptions of: a) for some applicants, lack of further maths for a pupil who could have opted for it (obviously not all schools offer it), and b) sticking to three relatively cautious options for a pupil at a very high powered school where most of the best do four. Though even that latter scenario would not attract attention if they were three essay subjects.
I think it's partly just the psychological realities of interviewing - once you've seen a student in person (and often also marked their attempt at a test you have set) you tend to be swayed more by that experience than by other factors.
Of course the situation is different for admissions tutors in heavily oversubscribed departments which do not interview (e.g. UCL). They are forced to depend much more heavily on the facts as they appear on the UCAS form (e.g. GCSE grades, predictions, subject choices).
As for the OP's original question, I would probably advise avoiding four very heavy essay based subjects, but the addition of a fourth slightly "different" A level generally looks interesting and is fine if she wants to do it, provided it won't cost her a top grade in one of the others.