You've got to be honest with her. If you're not comfortable you should speak up, and being that your friends she should understand its nothing to do with her it's just you're doing what you think is best. I know if you was my friend I'd appreciate you being honest!
Yea do not be afraid to put up boundaries with everyone. I have the same concern , having my baby Dec/ Jan and I’m already warning everyone I plan on isolating and they prob won’t see me for 3 months. Honestly ever since 2020 every year around that time everyone I know gets sick either with Covid or something else. Our babies are vulnerable and it’s up to us to protect them.
Honestly, just say it how it is like you have in in this post. She should understand. And just say you would still love to see her, on her own. There isn’t really a need for to bring her daughter as well