Goodness only knows what happens if someone dares to die a day before an in person exam...
General advice following (from 40 years of doing this):
If they are "fit to sit," we generally advise students is to sit the exam, having submitted whatever evidence they have, and then follow up with more & more official evidence later. They need to make an official request for mitigation BEFORE an exam, but they shouldn't miss the exam - doing the exam in the summer resits rarely gives students a better grade in these circumstances. They've lost momentum etc etc
Obviously, if a student is in surgery or recovering etc, then they they're not "fit to sit."
Once the mitigations have been formally requested and paperwork submitted, the "special Circumstances" or "Mitigations" committee will look at the student's spread of marks across all years of their course, together with the evidence of illness or emergency personal circumstances at the time of the exam, and see whether there was an effect.
At my place we have a set of evaluations of impact (low impact, no impact, high impact), and these are then passed on to the Exam Board. The Exam Board can then use these in conjunction with regulations about rounding up, or "preponderance" etc etc to determine the student's overall grade and thus graduating class mark.
Mitigations committees generally assess without a student's name - they are looking at the actual figures of marks & grades. The Exam Board doesn't see the mitigation documents - it's all very anonymised.
Often, students may feel there was an impact, but their marks don't reflect this ie. the mark for the exam taken under mitigating circumstances is generally no more than a couple of marks lower than the overall run of their work. Pretty normal variation, in other words. In this case, the student's overall class mark is very unlikely to be affected.
So your DD should make an official request for mitigation, outline the concrete ways her grandfather's death has impacted her ability to prepare for the exam eg. traveling to family, away from the library, time taken in helping you etc etc - she should try to be really concrete about this.
Then she should get on with studying & preparing for her exams. I tend to advise students to try to use study as a way of distracting them from their anxieties - do an hour of study, then 30 minutes of worrying - it sounds very pragmatic, but if she feels she has a plan for study, then that might calm her down more generally. It might help her to feel that she can rescue something of "normality" in spite of her grief. This could be a moment of personal growth & resilience for her, rather than everything being awful - here's at least one thing that could be achieved.
It's compartmentalising, but her studies & her future are important, and generalised upset is not helpful for her to dwell in. But then I remember when my grandmother died (and I'd spent a lot of time with her in her advanced old age - she died at 90), I got a tremendous burst of energy and the desire to really live - it was my first experience of the death of a close relative, and started that maturing process of "Life is short & it's not a rehearsal."
I've tutored students with dying parents and what is really difficult for them is a version of survivor's guilt. Maybe she's feeling that - but her grandfather is unlikely to have wanted her to plough her exams - that might help her.