I have no idea how I would have reacted....I would have been surprised like you were. I've found the older I get, the more likely I am to say what I think, soooooooo....maybe I would have said something that I would have regretted later. I think it's best you didn't say anything. On the bright side, she must like it to be using it where everyone will see it.
I have a friend who made a lovely appliqued poinsettia quilt and gave it to her son and his wife only to find it folded and in the dog's bed.