First you should inform your friends that they should have you replace the bumper guard/grommet set before damage gets to be that severe.
As for stringing with wear to the frame, I personally don't see a problem with it. With wear that extreme, however, it's advisable to be particularly diligent when inspecting the frame looking for signs of cracking. If there are cracks, advise the customer before removing the strings. If you find cracks you have two options: (1) refuse to string the racquet or (2) inform the customer that you'll restring it, but in the event the racquet collapses, you won't be liable.
Need help finding lost dog: walks with a limp, recently castrated, can only see out of one eye - answers to the name, "Lucky".