Her tiredness will contribute to a lot of the behavior you are seeing and co-sleeping is a personal bane of mine to the extent I will not accept co-sleeping children until that habit has been stopped at home and broken.

It is totally unreasonable for a parent to co-sleep with a child and then expect a group care situation to deal with their child being understandably confused by being placed in a bed while awake to sleep unattended. It's also totally unreasonable for a co-sleeping parent to expect the group care provider to enable a habit that means other children are unsupervised.

I would be explaining to the parents that you cannot supervise the other children in your care while rubbing their child's back because she doesn't have the skills to settle herself to sleep. Likewise, I would explain that sleeping is very key to the developmental needs of young children not just their child but the others who are all being disturbed by their child's inability to sleep.

As a parent, they are meant to be teaching their child the skills they need to be independent but co sleeping is the very definition of making a child entirely dependent on a set of circumstances all being perfect.

Let the parent know why this cannot be facilitated in group care and explain to them once she is able to sleep independently, in her own bed, without being rocked and cradled, then she can extend her day to full day. But until then, it's not possible to give her the level of attention this habit is requiring. She is 2 years old! Odds are she is already not the youngest child in your care. If she is, odds are in a few short months, she won't be the youngest. How is it reasonable that they expect you to not only ignore the needs of all the older children but also ignore the needs of younger children transitioning in, when your whole focus is on their child due to a habit they were too lazy to break.