I think this is unacceptable. There is no way I would voluntarily put that amount of work into a QoV and have it wrecked (in my opinion) by the volunteer LA'er. I'm not confrontational either, so I would probably rip it out and re-do it myself. Even if the quilting is done simply by you, you can then be proud of your quilt donation.
I do agree though that it should be brought to the group's attention. Whether I would do this or not would depend on how comfortable I am with the group. Maybe the group is unaware of the cr*ppy job the LA is doing on these quilts, so it should be shown to them first.
Good luck!