If her PR status remains intact, what if she wants to enter Canada with a green card? the border officer would normally say you are a PR of Canada and should show Canadian documents.
At a land border, she could show photocopy of expired PR card or in many cases, just passport - they have computers and will look it up. If they ask why no current pr card - haven't got around to it, or whatever, and live with/accompany citizen-spouse. If you will only be entering at land border, even the PRTD isn't strictly necessary. (Still advisable because may wish to fly, and there is more likelihood of being sent to secondary for inspection, which is an inconvenience.
One year PRTD is not a helpful one because her original passport could be expired in between. We are close to the Canadian border and may want to travel there occasionally, having PRTD would not be the solution.
Sounds like she needs to renew her passport. Once that's in hand, PRTD is a solution, even if it's not your preferred one.
I was of the opinion that as long as someone accompanies a Canadian citizen, that person should have a valid PR card and her/his PR should be renewed automatically. Not sure when this PRTD was introduced for these cases. The Canadian immigration system needs to clearly differentiate these cases. In her case, she has two Canadian-born children, in addition to a Canadian spouse. yet she has to go through the hassle of PRTD. this doesn't make sense.
Okay, that is your opinion.
But there is another perspective: that PR status is primarily designed for and intended for those who live in Canada, permanently - you don't get nor receive nor keep PR status on the basis of having Canadian children (for example). While the other allowances (like accompanying a citizen-spouse) exist, those are more exceptions than core principles. In other words: no guarantees against inconveniences (like applying for and using PRTD, which is perfectly serviceable).
Note, I'm not advocating a position on this. Just noting that this seems to be close to the way it works, and it actually is mostly functional, even where it might not be how you think it should work, and I'm certainly not arguing it's perfect.
As noted, you can likely get the PR card by applying in Canada, although processing times and inconvenience of picking up may also not be what you'd prefer.