You didn't state how old you think the squares are but back in late forties and early fifties I did embroidered pillow cases etc. Used them within the family and I don't have any recollection of the blue staying after a couple of washings. That being said I'd leave them for charm as suggested earlier or add sashing to cover. Either one creates a save and preserves the quilt and your friend's treasure and memories of her grandmother. They have already kept it all this time. My money is on it washing out once finished because the early fifties was when they first came out with the laundry markers that faded over time. Permanent markers came along a bit later.