You are correct, and there is no special workaround**. Either your daughter itemizes, which forces the spouse to itemize even though his deductions are less than the standard deduction (raising his taxes), or she uses the standard deduction so that her spouse can also use the standard deduction, but this raises her taxes. (The spouse will at least get to deduct his state income taxes.)
The mortgage and property taxes are supposed to be deducted by the person who actually paid them. If your daughter were to allow her spouse to claim some of the mortgage interest and property taxes (to "even out" the itemized deductions) there is no particular way for the IRS to discover this, except in the unlikely event of an audit (less than 1% chance). But she's not required to do that, and it could be viewed as improper.
