你拆解錯誤。She didn't know [what to do](know的受詞)where 修飾的是 the situation。(我們中文也有「在這情況/狀況裡頭(如何如何...)」的敘述表達,這用的是抽象的空間概念):She had to work with such a tough person [inthe situation->where].
https://www.ahdictionary.com/word/search.html?q=whereUsage Note: ... *Where is also used to mean "in which