Is it permissible for a mother to deed her dwelling to her five living sons, excluding her deceased daughter's daughter, and is this considered a deprivation of inheritance for the daughter's children?

The children of a daughter do not inherit from their grandmother (their mother's mother), as they are not considered heirs in the first place. If the registration of the house in the names of the children is intended to transfer ownership to them after death, then this constitutes a bequest to an heir, and a bequest to an heir is forbidden by Islamic law.