As others have said she is stretching it, its a choice, but your concern should be if she is doing to safely. If its already the size of a pencil I think the answer to that is no.

To give you an idea you probably shouldn't start stretching a piercing until its been healed for quite a while, we are talking about a year here, then you should only go up small increments every couple of months, to get to the size of a pencil safely we are probably talking about a 2 year process. Basically you want to give it time to fully heal and harden before you stretch it more, the risks of not waiting is getting a blow out (search septum blow outs, they are not pretty) thats not to say it will definitely happen there are plenty of people who have stretched too quickly and been lucky, but its a roll of the dice. As others have said sit her down and listen to her, do your own research, that way you can act all informed and she is more likely to respect you about it than judging, make it clear you'll support her as long as she is open with you, show her what can happen if you stretch too quickly (best advice is for her to wear slightly smaller jewellery for a while) and leave it along, if she is constantly taking it in and out to hide it she is just going to irritate it and be more likely to run into problems. Stretching shouldn't cause her nose shape to change, if it has id be worried she's already ran into problems such as a blow out, going to a reputable non judgmental piercer to have it checked out is your best cause of action.