Lyta-Zod's death in season 2 of Krypton seems to disprove the theory about Lyta being Superman's grandmother. However, it's possible that Lyta's death and its impact on the timeline is more complicated than it seems. In fact, Lyta may actually still be Superman's grandmother, completely changing our understanding of why Superman was actually erased from the timeline.
Season 1 of Syfy's Superman prequel series focused on Superman's grandfather, Seg-El (Cameron Cuffe) and Adam Strange (Shaun Sipos) trying to preserve Superman's legacy by defeating Brainiac (Blake Ritson) and saving the planet. Along the way, they encountered a time-traveling General Zod (Colin Salmon), who turned out to be the future son of Seg and Lyta (Georgina Campbell), as well as the uncle of Superman. At the end of the season, Brainiac was stopped, but his defeat came at a great cost. Since Krypton was never destroyed, young Ka-El was never sent to Earth. Krypton's fate was changed, causing Superman to be erased from history.
Krypton season 2, episode 6, titled "In Zod We Trust" confirms that Lyta was killed by Jax-Ur (Hannah Waddingham). Jax-Ur tried to force Zod into withdrawing his forces, but when Zod attempted to double-cross her, Jax-Ur retaliated by slitting Lyta's throat. Lyta's death will be felt throughout season 2, as cast members have stressed that this moment has changed the show forever.
Lyta's death has other meanings as well. First of all, it opens up new questions about Zod and the timeline. Zod should have disappeared, just like Superman did at the end of season 1. Also, there's the matter of Superman's heritage. Ordinarily, Lyta's death should mean that Lyta isn't Superman's grandmother. It was theorized that one of Seg's two main love interests - Nyssa (Wallis Day) and Lyta - would be the mother of Superman's father, Jor-El. Lyta's death should eliminate her from that discussion, unless there's another reason why Superman was erased.
What if Lyta really is Superman's grandmother? Brainiac's defeat and General Zod's rise to power could have changed the course of Lyta's future. General Zod becoming the ruler of Krypton set Lyta's death in motion. When Lyta's future was changed, it may have automatically erased her grandson from the timeline, which means there could be multiple reasons why Superman doesn't exist anymore. If this is the case, it means that Seg and Adam will have to do more than just defeat Zod if they have any hope of restoring Superman to the timeline. More time travel may be needed, since Lyta's life will somehow need to be saved.