This etymology is basically correct in the connection it establishes between "old woman" and the adjective "old", the two belonging indeed to the same root in modern terms, although γραῖα is not derived from γεραιός. It is formally very simple, implying only one modification, a syncope. And it is semantically straightforward. It is all the more surprising that it is found only in a late source, and that authors providing various etymologies for γραῦς and γραῖα do not mention this one – because they found it semantically uninteresting?