drupal_is_denied() has been removed from Backdrop, and has no alternative.
The purpose of this function was to check for users that had been blocked by IP address, and deny access to those users. In Backdrop, we've decided that blocking users by IP address should be done at the server level, and not at the Backdrop level. Data about IP-blocked users is no longer stored in the database.
If you have a contrib module that calls drupal_is_denied() the call to that function should be removed.