Thanks so much everyone. This person truly is very sweet and after writing her she immediately took down the listing and apologized profusely. I knew she no ill intent, but it did raise this tricky question.
In any case, my understanding is this.....if a product is handmade, it cannot be purchased on Etsy and resold by the buyer on Etsy. By putting the print in a (non handmade) vintage frame and listing the product as though the *print* is for sale, "embedded" in a frame, I considered it re-selling.
Thanks to your help in this thread, I was able to tactfully approach the subject with her and all had a great outcome with zero drama!
Thank you so much!! :)