I would use it. But I'd make sure to tell the recipient to only wash in cold water, and I'd maybe hand them a box of colour catchers with it
Can you discuss with your customer/friend and see what he thinks? Show him the current state (not the early ones), and tell him what the risk is of bleeding. Then see if he's willing to take the care required to maintain the look of the quilt, before you put the red fabric on it.