I'm not sure what you mean here. You don't collect royalties BEFORE the fact. Royalties are collected AFTER a sale. Otherwise it's an advance fee. Legally speaking, yes the copyright owner is entitled to a certain % of every CD/song sold since the intellectual property is not Jorn's or whoever did the tribute. If Wendy has the intellectual property to the tunes, then she gets a % of those sales. That being said, we're talking about what? $2,000? It's probably not much at all because she's only making a few cents on every sale and artists don't get paid royalties until the label has recouped all the costs involved in making the record. And of course, this is assuming the label is allocating and paying royalties. This is metal, the genre of music where many labels don't even pay royalties to their actual acts, let alone to a third party.
No you don't need to sign a contract to cover another band. There are royalty collection services (in the US it's Harryfox, in Germany it's GEMA) that set the standard for these things that all artists must obey.
It's not a "deal," and there's not a whole lot of money for her to be made here. She probably sees more money on royalties directly earned from DIO album sales.
