Weighing in here as an Oxbridge tutor, to say that rustification (or as I prefer to call it, suspension) is absolutely not a punishment in a case like this. I have had several students take a year off for mental health reasons (eating disorders, substance addiction and the like). In the view of the college, this is no different to taking a year out for any other kind of debilitating illness that affected the student's fitness to study. It is not punitive in any way.
I'm happy to say that in all the cases I've dealt with, the students have returned and completed their degrees successfully. The essential thing is that during the year away, students get access to all the medical help and therapy they need, so that they can be in a better position to cope when they return.
I have the utmost respect for some of these students: Oxbridge is a high-pressure environment that represents a challenge for everyone (especially at the beginning) and trying to cope with the workload even when you don't have an illness or disability is no small feat. So to cope with illness and/or disability, and do the degree anyway, makes them worthy of respect and admiration in my book.
Another thing I would say is that students don't get suspended lightly. Numerous meetings will have taken place with your DD and the college welfare team, her tutors and the college GPs. A lot of different people, and your DD herself, would have weighed up all the options and come to the conclusion that this is the best thing for her to do. It would be wrong to assume that just because a student has been suspended, the support she was receiving from the college was inadequate. Sometimes tutors can try to move heaven and earth to help a student, but it's not enough - the student is ill and needs to go away and take time to recover.
It's too bad that your DD didn't register with disability services earlier, because that might indeed have made a difference, but at least she will have a mentor when she returns.
The way the Oxbridge courses work unfortunately means that you can't really take part of the first year off - it's either the whole year or nothing. The Prelims exams at the end test all the material covered throughout the year, and if you miss a term, there's no realistic way to cram the missed material back in later in the year (because everyone keeps moving ahead at the same intense pace). That's why redoing the year is the best option.
Do encourage your DD when she comes back home. Focus on what she has accomplished; I suspect she will have had positive feedback from tutors as well as negative. She has made a start at her degree; it's absolutely possible for her to go back and finish it, and indeed that's what her tutors will be expecting and hoping for her to do. Encourage her to stay in touch with her tutors via email.
As a mum myself I would be happy to talk to a student's mum, but as Jeanne has said, we can't - students are adults and that would violate all sorts of confidentiality rules. It's good that you are going to have a chat with the chaplain.
All the best to you and your DD. 