CFred is right, she will be illegal if your child makes 6 daycare children at one time.
School-age children have ALWAYS counted in daycare totals. Before the new rules, they counted until age 10, now they will count until age 13. It has been a common misconception - providers either actually don't think school-age children count, or they pretend they don't and tell parents that, but it has never mattered how long a daycare child is in care for - the rule has always been 5 daycare children at one time, no matter what.
If all her own children are over age 6, then she's fine there, and is allowed her 2 under 2 daycare children as part of her total of 5. That's all fine. But if your child will make 6 daycare children, then pull him out of there. Better to know your child is in a safe, legal environment than risk her getting found out and shut down, and you being left scrambling mid-way through the school year.
Further, exactly what cfred said - it is providers like this who are willing to "bend" the rules that have brought all these changes about and forced many good providers to shut their doors or reduce their numbers to count their own children. Letting her get away with it is adding to the problem.