It changes the dynamics certainly and brings up some questions:
How would Franz Ferdinand’s murder will be handled with a Germany where Wilhelm is not willing to risk war with a Britain with Victoria at the helm? Does Victoria try to mediate?
What happens after Victoria dies? Would Wilhelm start to become hostile towards Britain or would George V be able to manage him?
If World War I is delayed until the 20s as a result of Victoria living longer, how would a World War I in the 20s be different?
Is it difficult not to over-personalise relations between the Great Powers; in the end interests, not family squabbles, led to the Great War. Wilhelm couldn't change the war plan, Nicholas was trapped by mobilisation schedules, while George had no say at all in the decision by Britain to declare war.
That said, there was undoubtedly a froideur in relations between Wilhelm and Bertie that started well before the latter became Edward VII. Although you can perhaps trace the beginnings of the naval arms race to yacht racing at Cowes, this began while Victoria was still alive. Even if the rift between Bertie & Wilhelm is slowed by the former never being ascending to the throne, there are other familial tensions, like the treatment of the Dowager Empress Frederick, Bertie's sister Victoria, by her son after the death of Frederick III. As Victoria (the elder) grows older her grip & influence on personal affairs will decline.
One big butterfly is how Victoria would deal with the Liberal government (if it is elected in 1906, which still seems very likely) and its battle with the House of Lords. Edward VII & George V in the end submitted to allowing a prompt creation of peers to force through the Parliament Act, even if both requested general elections first. It is difficult to see a Victoria who has avoided senility agreeing to such a radical proposal, but if she has started to lose her marbles Asquith may actually find it easier to extort this promise. But get the Liberals out of power around 1910 and perhaps replaced by a Unionist government leads to prospects of major changes to both British domestic & foreign policy.
