I’d apply ED1 to school 1. It sounds like there is a reasonable chance she’d get in and it’s her first choice. Realize, though, that if she doesn’t, odds are good she’ll be deferred and not rejected, so while she can then apply ED2 to the school she could probably get into without coach support, she still won’t know with certainty if she might have gotten into school 1.
My guess is that even if the coach at school 2 had filled his roster, he’d welcome her next year as a walk on. He might also offer soft support (which she doesn’t need.) . (This depends a bit on the sport, but at most D3 schools, some part of the roster is walk-ons. If it weren’t, the coaches would have an excessive say in what the class looked like.)
It sounds like she sees the risk of this strategy as having no offers. Based on what you have provided, that seems unlikely.