All of these opinions are true... because we, as experienced quilters, know better than to use inferior materials in our work. BUT... it's her quilt and if she is thrilled with the Alf sheet, I would not butt in on her decision. It's not the end of the world if the quilt falls apart later... Sheets have higher thread count than quilting cotton and you may be surprised at how long it lasts. Let her make her own mistakes and learn, rather than offend her.
Now, if she pointedly asks your opinion on the sheet's fitness for a backing, I'd tell her. But if she doesn't ask, don't try to change her plan. She may not appreciate it.