I have a 5th grader in Catholic school. All projects except for quarterly book reports are done at school because parents were getting so obvious about doing the whole project for their kid.
I make him write a rough draft of the book report and read it over. I suggest edits where he is changing tenses or veering way off topic but that’s it. He then types it up and draws a picture for the cover. I don’t supervise nearly as closely as some other parents.

my kid school banned homework and outside projects

This describes my 5th grader and she has a pretty significant case of inattentive ADHD. She is super bright but has trouble executing. She sometimes gets so lost in big ideas and making something perfect, original, and creative that she skips over the basic and more boring steps required to fully complete an assignment. I sometimes intervene to break projects into steps for her and then help her move along through the steps.

I would sit with her and make sure she understands the directions. If there is a rubric or steps, she should learn to make sure she explicitly addresses the questions.

I just might

Is she in a gifted (or AAP) classroom? Those classrooms are supposed to offer less scaffolding to let the kids figure some of this out on their own, but that doesn't work for every kid. My middle (who also has scored highest on all the standardized tests) really really needed to be walked through how to use a rubric to complete a project. She is, thankfully, very willing to accept help. My oldest is not as amenable, but also muddles through a bit better on what teachers expect. When she was younger, if I saw she was really floundering, I would ask once if she wanted my guidance and then leave her be.

In terms of the teachers "giving [your kid] the benefit of the doubt" I would bet your expectations are just too high. But that's a reasonable conversation to have. Ask the teacher if what your daughter turns in is on grade level, and whether she is meeting or exceeding expectations

Yes she does

Does the teacher offer a handout that explains the project and what she expects?

All of my 5th grader's projects are done at school (MCPS). She usually has a page of math nightly, but she does it on her own when she gets home from school. She may ask for help if something is hard, but generally I just confirm she did it verbally.

my kid doesn't reeally come home with projects...

How independent is your 5th grader with homework and projects? I'm not sure how to balance this for mine- for example, she had a project she had to work on over spring break and really had no clue if it was supposed to be the rough draft, final draft, typed or not typed, etc. and it came down to me needing to email the teacher just to get that information. A lot of times, she will more or less miss the "point" of the more open ended assignments (essays, projects, etc.) and REALLY veer off the prompt or the directions but refuses to accept help and it turns into these big meltdowns.

She is very very smart but I feel like is skating by on her intelligence and it's going to come back to bite her in the butt in middle school. I think the teachers are doing a lot of accommodating/enabling where they know she's smart and give her the benefit of the doubt- lots of projects and papers that are rife with errors but somehow get very high grades. I feel like she is being set up to fail in middle school.