I think you probably need to get proper legal advice. The issue is whether your daughter would be viewed as a sub-tenant of her friend, or a tenant of the landlord. If she's a sub-tenant, then she's paid her rent, and that's the end of it.
It might be worth telling the landlord that the correct avenue for him to follow is PRTB, and that any further correspondence will be ignored unless they follow corrrect process.
Get proper legal advice.
But in my opinion the landlord has a case here.
Actually, I know its nothing to do with your case, but I wouldnt be surprised to see landlords in future chasing people who leave owing them more than the deposit, for the full amount in future. At the moment most leave it at just keeping the deposit. But i'm seeing a lot of landlord now fight instead of accepting losses.
The PRTB or Threshold are not relevant in your daughters case either. Talk to a solicitor, not the internet.