I agree with turtledove. The framed photo of her granddaughter was brought into MIL's house with other things being given to her and she assumed it, too, was for her. If, after the fact, she realized it was not for her, but she'd made a mistake in thinking it was, she could be covering up her embarrassment by saying she saw it, liked it and took it.
Frankly, had I been her son I would not have wanted to tell her it wasn't for her, especially seeing that she was happy about getting it, which I am sure she was.
I suggest to the OP that they make another print of all three pictures, get three nice matching frames to frame copies for themselves, and give the other two with frames that match the one MIL has to MIL for a gift.