I would stay with honors. B in Honors is the same as A in regular.
The students she is in with honors are going to be more academically focused.
She will be on track for other honors classes (like others say, she may have an easier time with)
She will learn that sometimes you need to learn outside the classroom…tutor, Khan academy online, practice problem books, study group, office hours.
A next step of Precalc and then CalcAB is a fine plan. Don’t worry about skipping.
Another thing you both can do is look at this issue: “As mathprof63 said above, the tests do seem to be from another planet. She said they never seem to be anything like what they are doing or how they are doing it or how it is presented.”
Look at a test question like this. See where it is covered in the book. See where it is covered in her notes. See what kind of homework was done on it. Did she actually read that chapter? What was different about it?
Can she talk to her teacher and say “we did this kind of problem like this in HW, but this test problem was different. How should i approach this?”