The last paragraph basically makes the decision for you. "If the scholarships/grants exceed the qualified expenses, the student will report the 1098-T". Since box 5 exceeds box 1 or box 2, that applies.
The "more than $6100" part doesn't apply, because she has self-employment income that exceeds $400 and is subject to the SE tax.
Your daughter will still select the option for "I can be claimed on someone else's return", since I'm sure there's no question that your daughter did not provide more than 50% of her own support in 2014.
