...I think it is nice she is acknowledging the baby has a name...

If you are happy to tell it to people, and put it out there, then of course people will call the baby by her name - because they are your friends, you have told them she has a name and that is generally what you call people by, their name...

I think if you don't want the name used, you need to stop telling people what it is, and tell her exactly how you feel. It is going to probably make her feel terribly embarrassed or silly, but you need to be honest with her and ask her to stop using it and you will have to explain why.