Why does a dementia patient forget someone who is with them everyday but remembers others they don't see often?

I don’t know but I suspect it is because the person they haven’t seen in a while is either a part of their distant memory which is still intact or looks like someone who is from her past.
I remember my own GM, who was dying and did not have dementia. She was 90. Had not taken food or drink in quiet awhile. She was unable to lift her head or respond. Seldom opened her eyes. Yet when her grandson, who looked very much like his father. her deceased son, came into her room, she rose straight up to great him. How she was able to do that was a mystery but I saw her as I was also in the room along with others who had been sitting with her during her last days.
Another thing I have seen with my DH aunt, 95 and with dementia. She will respond very excitedly to some visitors, carry on a lively conversation and when they leave will ask me who they were. Five minutes later she doesn’t remember she had a visitor. If you ask her to tell you their name while they were there chances are she wouldn’t know although she was acting as if she knew. Same with phone calls. Someone will call and I’ll put the phone on speaker so she can speak to them. I might say, this is Bob. She might repeat Bob but she has no idea who Bob is to her.
Some days are better than others with memory.

A brain with Alzheimer's is like a computer with a broken CPU. Don't waste your time in trying to figure out all the wrong informations that is producing.

Casiek, with dementia the brain is going backward in time. Since you are her grand-daughter you have been in her life much less time then say your mother and other relatives of that era. Are those the people that she seems to remember?