If she is found to be ineligible to naturalize (fails civics test, fails english test, physical presence test, 3 month residency test, continuous residency test, etc), she remains an LPR.
Some N-400 cases will go through the entire immigration history. If it is determined she was improperly issued a 2 year or 10 year GC, then yes she might lose her GC (aka LPR status). Here one of the most hideous cases I know of:
In this case, USCIS said it would not move to revoke LPR status, but said citizenship was off the table until I-407 / I-485 / new GC / 3-5 years of new LPR status. The couple split. K-1 and Conditional LPR status is so dangerous for and unfair to immigrant spouses and children.
In most USCIS districts, N-400s taking under 6 months.
Hopefully online and not by mail.