They do this. It passes. Phases.
Just take it out of her hands when she does it. Don't have to scold/punish for it. ALSO, you might want to say something like "No. Danger." Thus introducing them to the concept of what 'danger' is, and that they can get hurt. In time as they get older, then they will KNOW what "danger" means. I did this with both my kids.
Chewed up paper can be a choking hazard or get lodged in their throat, causing suffocation. Just like any food particles.
So, this is the 'danger' in it.
My kids did this too as babies. It passes.
All the best,