I'll leave the morality of spend down to others.
By observation of older friends, the quality of care is a daunting problem no matter what..and while some places may seem to duck lower pay clients at the door, once inside it seems equally daunting ...and that I'll leave to local calls.
For a spouse to spend so as to have nicer furnishings, new TV, repainted rooms, newer car or nicer kitchen fridge...so be it.
If the life tenant is talking about making major capital improvements for the purpose of making assets going away and benefit the remaindermen ..that flunks the smell test....and may flunk more ..... Parent would be smart to pro to comment before they go,down that road .
I personally think massive prepaid funeral is a risk and a waste for other reason..but that's a personal call...There is some provision in the rules to allow for final arrangements..but I don't know the details.
Be careful about gift . . -sales. with a retained life estate ..it's probably NOT out for estate purposes ..Which may be GOOD for tax basis purposes / step up .....but a gift/sale/retained control might NOT be out for Medicaid even IF it's more than 5 years old..get a competent elder care attorney to comment.