I can't give you any hard data about how common this is, but I can tell you that your post describes my mother perfectly in what I now know was early-to-mid stage of her Alzheimer's-type dementia.
My mother's GP tried various medications and she did get relief with some of them, although this benefit diminished as the dementia worsened and my mother was unable to manage her own medications.
What cured the anxiety was the move to the care home. My best guess is that relief from responsibility (she was living alone at home with no services or help and not coping at all, despite her protests to the contrary) and relief from trying to "cover up" about not functioning okay, combined with better nutrition, sleep, medication management, and more company, all were what helped with the crippling anxiety.
A year after the move to the care home, she still sometimes has a small amount of anxiety or distress but can be reassured or distracted. The major anxiety is gone. She is much, much calmer and content.
I would talk to the GP and see what they could offer, and definitely a medication review is a good idea, if applicable.
Otherwise, is it possible for her to have more company and social interaction? Carers, a day centre, something like that?
