Its not the best thing for anyone. The two souls deserve to rest and they aren't even in a state to give consent to become an amalgamation that looks like a person that'll be used as another tool (Maiden) to fight and die against Grimm and their allied forces.
A grand daughter would be putting unfair expectations on a completely new person.
So, I want to precise a little thing (you're the last one that talked about the subject, but this concern everyone):
While Stella does not know exactly what the new beginning will look like, she does know enough to be able to tell that this take:
Is probably not that far from the truth on some level.
Reason I had her tell that Oz can think of her as a granddaughter is because it will be a combination of two souls forming a completely new being, a little in the same way as the combination of two genetic material forms a new being in the child.
Here, in this version, the maidens aren't just tools made to fight, they genuinely were actual people with a faulty reincarnation that led to them losing almost all traces of who they were before.
She would make absolutely sure the result is not an abomination, and to still scrub the souls of memories enough to allow them to really start clean.
When I say new being, I do mean new being, the body too.
Now, the other option does give a more final rest, that is true.