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She openly told her boss that if they tell her to come into the office she will willingly quit the job and forfeit unemployment so they can downsize that headcount and spread around the work to other employees?
Gotta play 3D chess, don't show them your hand. They now have an easy way to fire her on demand without cause and without having a mark on their employment numbers.
Have to go with the angle of: if you make me move you need to pay my relocation costs because you have asked me to move. After all, this isn't new and they have known your home address for 10 years. Make them cover the increased cost or they get to pay unemployment for laying you off. That's the only real angle you probably have anyway that gives them a cost.
Not to mention she wrote a manual on her job so her replacement will have an easy time picking up.
If she’s as petty as I am, the manual will receive a rather intense update prior to her departure.
Better make sure version history is off