Dd2 dropped a non-ebacc subject at the start of y11 (she was doing a seond mfl as a twilight option, and dropped a daytime subject to balance it out - school wouldn't let her do it at the start of y10 but a year later other people were also dropping subjects and it wasn't an issue).
Dd3 is now coming to the end of y10 at the same school (not a grammar) and we've just this week negotiated for her to drop her mfl. She has health issues and crappy attendance, and it's been really tough to keep up with the language work. She actually did ok in her end of year exam (5!) but homeworks take forever, and it just doesn't seem worth persevering at this point. Some extra time in school will be more useful to her.
Ebacc/progress 8 is no use to anyone apart from the school - her head of year shrugged and said, "don't worry, that's our problem not yours" - and only UCL has any MFL requirement, which you can fulfil in your first year there. So I'm absolutely not worried about her university applications.
I would suggest having a look at the entry requirements for any courses she's currently interested in, at 2 or 3 universities, and putting your mind at rest.
And I would certainly suggest talking to the school - but perhaps go in with the attitude that you're asking them what they can do to help her improve, rather than just asking for her to drop it out of the blue!