Perhaps you can test this on one block for the quilt. I would simply stitch another seam that is a scant 1/4". Your 1/8" seam will be caught in the seam allowance and since piecework is usually pressed to one side instead of open you shouldn't have any issues. It will save you the unpicking part. I would test it on one block though to make sure it works. In theory it should but theory doesn't always manifest into reality.