As much as you know her you don't get to decide what will and won't destroy her. This is really none of your business and I'm sorry that everyone made it so.
Your friend created this mess (regardless of whether she knew who her daughter's father was or was not she knew there was more than one possibility and deceived her husband for over 18 years! What did she really think the outcome would be?). She is at least, in part, responsible for any hurt that Ally feels in response to this. Ally is innocent in all of this, but she is also an adult and, quite frankly, some would argue that she deserves the full information. Ally may need to know someday for medical reasons or to understand why the person she thinks is her father left her and her mother. There are a number of ways she can find this out in the future and that may well happen. I personally think it is a shame her mother still is trying to cover-up her own mistakes by continually lying to her daughter and justifying it by saying it'll destroy her. For all the mother knows not understanding why the father left may destroy her even more. Yes it would be devastating for her to find out now, but it will also be just as devastating if not more for her to find out in the future (which may still happen). The whole situation is devastating, because of the choices her mother has made. Is it better for her to know now rather than try to contact the person she thinks is her father for years, suffer through years of rejection and then find out because her half-brother finds out and lets it slip one day? Who can actually say? It's pathetic that your primary concern is Emma in all of this.
Emma lied to her husband and children and this is a direct result of her lies. No one else's. Everyone's hurt is a result of Emma's choices. Emma acted on really shitty ways and Ally is right now feeling pain and confusion as a result of that while Emma gets to understand exactly how this happened and even use the court system to further control the situation and protect herself from her own lies.
If I were you I'd be more concerned that my best friend could do so many disgusting things to her own family members.
That said, you aren't Ally's parent. You're a close family friend but you aren't the parent, and this is really not your concern.
Say nothing for now. You know what Emma wants to do (and you know she wants it enough that she is willing to get a court order to protect her secret).
If Emma asks your advice give her the advice you honestly believe is best for Ally. Be a positive role model in Ally's life and always be transparent and honest with her when you can be so that she knows she can trust you. She may need you as a surrogate parent now that she has already lost one parental figure, especially if she ever discovers how her mother has treated her.
If you don't feel comfortably lying to Ally or your daughter don't lie to Ally or your daughter. But also be upfront with Emma about that. If you're going to tell Ally or of she asks you point blank let Emma know first and give her the chance to be a better person and be honest with her daughter. You can stop protecting Emma at ally's expense without disclosing anything to Ally directly because quite frankly it isn't your place to do so.