- Yes, she can stay in the US while her Extension of Stay application is pending, even if her status expires in the meantime. See this brochure from USCIS:
What if I file for an extension of stay on time but USCIS doesn’t make
a decision before my I–94 expires?
Your lawful nonimmigrant status ends, and you are out of status, when
your Form I-94 expires, even if you have timely applied to extend your
nonimmigrant status. Generally, as a matter of discretion, USCIS will
defer any removal proceedings until after the petition is adjudicated
and USCIS decides your request for extension of nonimmigrant status.
But if she will stay past the date she requested for her first Extension of Stay, she should file a second Extension of Stay before the end date requested for her first Extension of Stay. This is because if she doesn't, when the first Extension of Stay is decided, no matter if it an approval or denial, she will immediately be staying illegally and need to immediately depart. Even if it was an approval, the period of stay granted by the approval would have already ended, so it does not grant her status at that time. And since she did not file a second Extension of Stay, she would not have a pending Extension of Stay that would let her stay at that time, so she would need to immediately leave.
- It will be at most until 6 months after her previous status expired (i.e. until January 2021 if her I-94 expired in July 2020). See 8 CFR 214.2(b)(1):
Any B-1 visitor for business or B-2 visitor for pleasure may be
admitted for not more than one year and may be granted extensions of
temporary stay in increments of not more than six months each [...]