True. An empirical study of misunderstandings would be interesting. Although untangling syntax and grammar could be a rather Gordian task...I agree with you. She is unmarked (it refers to the head of the PossP, the closest (unbounded) noun, but the problem for some speakers, native and non-native alike, is in determining the boundaries. Sue's grandmother is a name, just like Sue. Both NPs (noun phrases) can head the PossP, which is why, I believe, pronominal she can be ambiguous for some.
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