Well you can just savescum to see her loyalty test for yourself. She's 100% loyal in my books. She struggles with it a bit, asks for the reason and hints she would rather you didn't make a move against her. But then agrees to help and tells Elis she would always be on his side. Then doesn't hesitate at all to use magic on Alaina when she resists. My GOAT Elf.
As for the imprisonment thing. Wouldn't work with her, same as the banishment in my eyes. She knows too much and she's way too powerful, so she has to be killed. Letting her go is just such a stupid risk if you don't trust her to begin with. And unless you're willing to kill her, you might as well just leave her be then.
Also sidenote here. But just saying, the "deranged murder" was highly satisfying in my books. WOULD RECOMMEND to all.