Justice Thomas Bradley handed down his decision on Wednesday and said the seriousness of the charge against Shields called for a large number of bail conditions.

"In my view, the risks associated with the applicant's release on bail can be ameliorated to an acceptable level ... she has demonstrated that her continued detention is not justified," he said.

Shields' solicitor Natalie Keys had previously told Justice Bradley her client's mental health had improved while in custody.

"She’s certainly doing well. She's obtained employment in the kitchen. It's a position of trust using knives and that's not done if there's still a substantial risk," Ms Keys said.

Crown prosecutor Jennifer O’Brien said she opposed bail for Shields as she was an unacceptable risk of committing further offences or presenting a danger to the community, even after Ms Keys offered further conditions for her release.

"The month before (the alleged offence) she barricaded herself in her room and expressed homicidal ideation while she had a large knife," Ms O'Brien said.

Ms O'Brien said her primary concern was the risk of Shields breaking her sobriety and using illegal drugs as intoxication was strongly linked to her alleged attack on her grandmother.

"Her ability to access drugs (will be) high. When she uses drugs her mental health destabilises," Ms O'Brien said.

Shields was banned from entering Beaudesert and multiple other Queensland regional areas and must not approach any witnesses or alleged victims.

She must also wear a monitoring device and consent to community support services reporting any failure to follow her mental health treatment plan and any suspected illegal drug use.

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