Yes, they may present the dashcam evidence in court IF it benefits their case.
I would choose Option 3 on the ticket (request a Trial with the Officer PRESENT).
Once you get notice of trial, you can then request disclosure. In your disclosure request, make sure you request the dash cam video, whether or not the prosecution plans to enter it as evidence or not.
I would also try to get a copy of the dash cam video prior to this as well. First try contacting the police station and see if they have a request form of some kind. It not, then try a Freedom Of Information Request to get it.
If your daughter did stop, and the video shows it, then the prosecution will not want to use it as evidence and may not want to produce it. So you would be best to try and get a copy yourself.
Anyway the officer advised her not to try to fight the infraction in court as he has the whole thing on dash cam!
You have no downside to fighting it. If you don't fight it, then you are simply found guilty of the charges and your insurance may go up and you get some demerit points. If you do decide to fight it, you at least get to see their evidence and decide if they really have a case against you. After you get disclosure and IF it does include a video showing that she did not stop completely, then you would simply show up at court the day of the trial and you can either (i) have your trial to try and fight it, or (ii) prosecutor may offer you some kind of plea deal. If you simply want to plead guilty after receiving disclosure, then you don't even need to show up at court.
What's the charge and section number for the excessive noise charge she got?