does seem like an informal take on have the smart kid teaching the other students. In my own experience this was not terrible and a bit of a learning experience about other kinds of learners. But it does certainly beg the question of why there isn't material for your daughter specifically if that is what is needed. Hanging out with her friends is basically a free period sounds like, with a new bit of info from time to time.
It is not differentiation, at least I wouldn't call it that.

Differentiation would of course be the teacher taking the time to find harder, deeper material for your child, even if the GT class is already harder and deeper for most gt kids.

If the teacher can't do this for just your child, maybe she can dream up an extra project for this new 'group'?