You are correct in thinking the MMI is more of a pass/fail situation than a outcompete/be outcompeted one. You must "pass" 5/8 stations, how difficult it is to "pass" each one I don't know, but every year the overwhelming majority of students in the pathway pass and progress onto the MD. You will hear the occasional story of maybe 1-2 students not passing each year. I wouldn't be too worried about it, I believe Melbourne themselves states that the MMI is not a culling tool to reduce applicants but just a quick test of your social/interpersonal skills to make sure you're at least partially suitable to study medicine.
But like Crow said, it's not a pathway your daughter should put on the top of the list, there's too many hurdles to worry about, and the duration of the course is quite long (7 years), tied with UQ and USyd. At the end of the day though, the decision is entirely up to her, and a degree is a degree.