Dear Johanna,
What you described with this mom sounds like a derm problem and not
necessarily directly related to breastfeeding.  I would recommend that she
see a dermatologist.

There was a good article in the JHL a few years ago on nipple problems by
Kathleen Huggins.  She works with a dermatoligist and they described a
similiar case.  Since this has been slowly progressing the last several years
I would encourage making this appointment before guessing at the diagnosis
and self treating.
Good luck.
Ann Perry RN IBCLC