This came about because I tried to set a boundary. Any advice please?
As you know, boundaries are made to protect us from undesirable behavior.
For example, no ice cream until you eat your veggies- every parent has said that at some point. And for parents of BPD kids, very few of us ever saw the kid actually eat their vegetables. They'd scream, they'd threaten, they'd be devastated for how horrible we were.
In your situation, you just did the same thing- no ice cream before your veggies. And your kid reacted badly, just like she always does. That shouldn't be surprising; she's using manipulation just like she always has to get that ice cream without eating her vegetables.
My advice is to stand firm, and even double-down if you have to. You're allowed to see your grandkid because you're a free babysitter. But I'm guessing that you're also supporting your daughter in other ways financially (which is more ice cream).
If she's cutting you off and treating you badly, then respond appropriately. Don't reward bad behavior just because you're scared of losing your grandkid. She's bluffing, and when you respond with anything she doesn't like, then she'll double down for a bit as well. But at the same time, she'll also want her ice cream (free child care + all the other stuff you do for her) and she'll come around to treating you like an adult should.
Everything about this is terrible. But you have to stand firm. Just because your kid is mentally ill doesn't mean that you have to be as well. That's what happens when BPDs abuse us- we become depressed, hopeless, and full of dread. So stop giving her that, stop worrying about what she's going to do in order to punish you. Don't give her that power over your life anymore- stick to your boundaries and let her live with the consequences.