She probably will have to take the dog back to the breeder if she gives her up. Tell her to read her contract. It's a good thing to stay friends with her so you can make sure she does the right thing. It sounds like a disaster waiting to happen.
When I was a kid, we had a GSD with hip dysplasia. He had a "guarantee" from the breeder, but in reading the contract and talking with the breeder, what that meant was that the breeder would replace the dog with another. So they'd have to return the dog and he'd (in all likelihood) be put down. Needless to say, we were all attached to the dog by that point and just did the surgery. He lived to be 11 years old after having both hips done at the age of 10 months.
So even if there is a guarantee, it may not pay for the surgery. Does she have insurance?
Now as to the teeth - my Zuzu also had a severe overbite and had all of her lower incisors as well as one lower canine removed. A little orthodontia on the top row to allow her to keep the one lower canine. The breeder had had the baby canines removed, and it was a wait and see to see how the adult teeth came in. Both incisors and one canine interfered with her upper palate, so we had them removed as per the recommendation of a veterinary dentist/oral surgeon at Angell in Boston. (He is wonderful and his family raised Newfs when he was a kid, so let me know if your friend wants his name for any follow up).
Zu went in for oral surgery with a limp from a shoulder/leg injury a few days prior. While she was under we had her Xrayed and an ortho surgeon did an exam. Her hips and elbows were great, but she has OCD in her shoulder and just had arthroscopic surgery for that.
Now, Zuzu came from a reputable breeder and she stands behind her dogs. But breeders are not magicians or seers and all they can do is their best. Both Zu's parents had all their clearances, she was cardio cleared, and the overbite was disclosed (and very visible) when I picked her up.
So she's not "perfect", and right now she's giving me a run for my money as a wound-up teenager who needs to take it easy on her shoulder...but she's also sweet, unflaggingly cheerful, and one of the smartest dogs I've ever met. Her wheels are always turning, you can see it in her eyes. Would the breeder have taken her back for the OCD? Maybe, I dunno. Didn't even check the contract. Because Zuzu is MY dog now, and there are no guarantees in life. Overall, I think I'm lucky to have her, and hope that the rough start for her will lead to a happy, healthy and long life to come.
Sorry this got so long, and hope it's a bit helpful. At very least, I can sing the praises of Angell in Boston, should your friend care to get a second opinion (though Tufts is also fantastic).