No. She isn't a reserve - she definitely has an Oxford place, and even if every offer-holder made their grades she would still go. It means that the department identified some strong candidates who were generally agreed to deserve an Oxford place. These then get allocated to guaranteeing colleges. The college who has accepted her will be very happy to take her (and so will plenty of others). They know that on results day there will be colleges who lose candidates because some people won't make their grades, and they can't predict which colleges will be most affected. So for example, College A may have 5 places for Subject X and lose 3 of their offer-holders, and College B may have 5 spaces but keep all of theirs. When results come out, if your DD has an open offer guaranteed by College B, she may end up being reallocated to College A instead. If College B is also a place down, they'll almost certainly keep her and not let her be reallocated, which is their right as the guarantor.
The reason that it has to come with a 'guaranteeing college' is because Oxford can't just say 'you have a place at Oxford and we'll sort out which college when the dust settles'. Even though the admissions process is centralised in many ways, it's the colleges who are formally speaking the admitting bodies and so an offer has to come from a college.
Try to encourage her to think of it as an extra surprise come results day. She will end up loving wherever she ends up. She has done really well and should be really proud of herself. They don't give open offers to people who they aren't confident deserve a place at Oxford.
Statistically, it's more likely that she'll end up at the guaranteeing college than at any other college. But there's a chance she'll end up elsewhere (so encourage her to look at it by all means, but not become too passionately attached to it).