I find the original situation confusing (per the background given by the OP unless she has two daughters that coach level 3) and some of the posts. Level 3 with kip is kip to front hip circle. If you bend arms or have a rhythm break, it's a deduction. There are no extra points but keep in mind many many level 3s get a deduction on their glide swing and even their pullover so if the kip is decent it may be a wash. Literally impossible to say without video but the coach should be able to determine if the kip is straight arm and ends in an appropriate stretch position.
Yes its kip- front hip right away. And yes I have two girls coaching now but one is really just a "helper", her older sister has been coaching compulsories for years now.
I don't find scoring high in level 3 that important. To our gym, its an introductory level, the level right before our team starts. So, if we have a level 3 that has a kip, they'll compete it. It's good practice for them and I feel makes them stronger and more comfortable on bars later on.