Why not use that information to see whether there is a better place for her in your company? Ultimately it's in your (the company's) best interest to keep smart

Why not use that information to see whether there is a better place for her in your company? Ultimately it's in your (the company's) best interest to keep smart people around, and the transversal skills obtained from forming an engineer in business practices can be extremely valuable. I agree with your statement on informality - there is a very thin line that's right inbetween boring formality and obnoxious casualness and it takes some time to learn how to walk it, but I don't think your engineer's words are that bad. A good manager (even N+2) should have some idea of the career aspirations of their employees, and your employee sounds like she'd rather be moved to a different position with less computer science stuff than be promoted for more of the same thing.