I was under the impression that Geno only has 15 athletic scholarships to offer. Yes, UConn could offer a merit scholarship, unrelated to the athletic scholarship she currently has. I think Geno would still use one of his 15 for CD, so she could still be on the team, get medical attention, and even travel with them.
I tried to research how Keirsten Walter's scholarship was handled when she gave up her final year of eligibility. My memory could be wrong, but I thought Geno kept her on a basketball scholarship & encouraged her to stay around the team and also participate in senior night activities. It was just very difficult for Keirsten.