You ask about undoing a guardianship for your mother. It sounds as if you have correctly figured out that it would be unsafe to do so. A guardianship can only
be undone if the person who wants it to be undone is able to prove to the court that appointed a guardian that the reasons for having it have changed and that it is no longer appropriate.
If your mother has dementia and is also a schizophrenic, I expect that her behavior would be very erratic and unpredictable. I would also expect that she may make the threat to have the guardianship undone, but she will not be able to make good on her threat.
To have the guardianship undone, she would need to hire an attorney. She can't because of the guardianship itself, which renders her unable to enter into contracts, unless I am mistaken about the extent of the guardianship you have over her. She would also be unable to hire an attorney because you have control over the money she has due to her appointing you her durable power of attorney. Where would she get the money to hire a lawyer? A guardianship takes away most of a person's legal rights, including the power to undo a guardianship. It may be possible for her to change guardians, but again, she would have to convince a lawyer that this would be appropriate. It seems unlikely, from your description.
As your mother continues to make threats and demands, you do not need to respond to them. Simply say "I understand that's what you want, Mom" and move on by changing the subject. Distracting her with other things to do, things she might enjoy may help her to calm down. She needs attention and may have trouble accurately expressing her needs, due to both the dementia and her mental illness.
You have a tough job caring for her and having legal authority over her, especially when she is not appreciative of all it takes for you to do that. Acknowledge yourself for the hard work and for trying. Consult with Mom's doctor if you think a medication adjustment can help her. It might. Persevere in your efforts to do right by her. Bless you for the work you are doing. Not everyone would be able to take it. You are stronger than you think.