That is a real stable in the older quilts. I would use it without hesitation. I have used good quality in quilt tops also. I would prewash it, as I do all my fabrics.

Not all muslin is created equal. Some has a really large amount of shrinkage... and some never even gets close to lying flat without alot of steam and a good hot iron. Take a piece, measure it , and launder it prior to use.
I use muslin alot for backings and have come to know which ones are better, in your case you don't know much about the manfuacture or even what year it was produced ... TEST!

Muslin is used all the time! Maybe you could have gotten it for cheaper from him.... next time agree and say "How about $5 a bolt?"

Gosh, your question really made me stop and think. When I first started quilting many years ago, I always used muslin for the backing- mainly because it was what my grandmother had always used, and because it was inexpensive. Then I started using quilting fabric for "special" quilts, like ones that were gifts, or for a bedspread that the top would be turned back and the backing would show. These days I use quilt fabric exclusively for backing on every quilt I make, but I have such a large amount of fabric that lately I have been thinking I would start piecing the backing to use up fabric.
But your question made me think about using muslin again, and now I think I probably will. Why not?

muslin is still used by many, many people for quilt backs- i know ladies who use nothing else. muslin makes wonderful backs- it washes up so nicely- gets softer & softer with use & laundering- and show cases quilting stitches. there are still many (traditionalists) who do not understand using prints/calico's- other fabrics for backing- muslin is (common practice) in many parts of the country.

If whatever I'm making is for me, I back it in muslin. I refuse to use yardage on something for myself. I'm satisfied with it and it hold up just fine.

I love the look of the quilting on a muslin backing..kind of embossed.

I use muslin. I love the softness of it.

I personally don't usually use muslin on the back of a quilt, as I prefer a color, but there is no reason you can't use it. It is priced less than printed fabric, and most muslins wash up very soft. If you have it, I would say to go ahead and use it.

I have been trying to use up some of my stash so I cut up a lot of my "good lord, what was I thinking" fabrics into 2-1/2" squares and just finished the top for the Film at Five quilt. Used muslin for the sashing and I think it works well with the scraps. I also have wide muslin that I will use for the back.