A misunderstanding would be, for a hypothetical example, her using blue thread because you didn't elaborate that you wanted turquoise. This is not only unethical its just plain inconsiderate. Maybe her stitch work is good, but no decent long arm quilter in their right mind would cut beyond a trim to square up a customer's top. You made the top that size for a reason so it wasn't right of her to take 7" off YOUR quilt. Maybe it wasn't obvious to her that you sent in two sheets because one wouldn't be enough and maybe thought you sent a backup sheet. She still shouldn't had butchered your work! The right thing to do would have been to call you and say "The backing you sent is too short. I can't use this unless I were to cut your quilt top to fit". There could have been other options even if she wasn't willing to piece together the sheets after explaining that's why you sent in two sheets. She could of had sent the backing for you to piece or if she had backing fabric ask you if she could use that instead and just add the cost of the fabric to your bill (which paying a little more would have been a lot better than getting a quilt that came back shorter!)
I would just never use her again. Why risk the chance of having another quilt altered like that? There are other long arm quilters who would of had the decency to make that call.