Is "what would you rather she does?" grammatically correct?
Yes, rather her do is grammatical.
Compare rather me do.
A pronoun in the objective case is licensed by the verb rather.
This is also valid:
What would you rather she say?
Yes, rather her do is grammatical.
Compare rather me do.
A pronoun in the objective case is licensed by the verb rather.
This is also valid:
What would you rather she say?