Ditto to all who say investigate other sources of discomfort and pain. If blanketing causes her physical discomfort it’s frankly not reasonable to “get after her.” It would be 10x better to leave her unblanketed. Also - check the fit of her rugs. Blanket rubs can be really painful.
Also, @Foxglove hit on a thing that has helped me tremendously with some of the mental/emotional rehab types I work with: training “don’t” is 100000x harder than training “do something else.” If there truly is nothing physical going on, you need to re-train blanketing with this horse. Right now it sounds like the combo of her reaction to blanketing and your/other handlers’ responses has led to a situation of massive pressure that lasts and escalates until the blanketing is over and (hopefully) all have survived. So this horse knows that “human approaching with a blanket” = holy $#&! high stress scenario. You need to find a way to re-wire that.
Were she mine, I’d work in an open space like an arena which is safer than a cramped stall, and start by just approaching and touching her - neck, shoulder, back, flank, etc. If she’s very reactive do it at a distance with a driving whip. She needs to be able to relax with you touching her all over - truly relax, like breathe and lick and chew, not just stand still zoning out. the beginning stages of this can take a long time, but if you put the time in to show them “hey, promise you can actually chill out” then it really really pays off in the end. When you can touch her all over and she can remain relaxed, you can move on to “blanket like things” - saddle pads, ropes around the legs where straps go, etc. When she shows signs of relaxation, you release the pressure - this is how you get a new response.
All that said, biting is NOT cool and not allowed - so yes, if/when she comes at you with her teeth during this you have to react appropriately - I personally am a big fan of sticking my elbow out and catching them right in the nose when they come to take a piece out of me. But the big and important piece here is that then you HAVE to go back to your emotional neutral and keep going with the exercise. The pressure remains on her until she starts to come down. She may not lick and chew and drool right away - for example, NOT trying to bite you is an improved and more relaxed response. So pressure comes off. Then maybe her eye gets softer, or she takes a deep breath. Pressure comes off. You build that relaxation response in her bit by bit.