If she believes the child to be in danger, she is obligated by law to report it.

There are 3 things actually. If the patient is threatening to harm themselves, threatening to harm others or child abuse.

Likely though, the therapist will give her a chance to move her child to a safer environment before she would report it to CPS. She can't legally do anything about your friend herself, she is an adult and can make her own choices, but that child has a right to safety.