This is never, ever, ever a good idea and I recommend it to no one.
What I do recommend in this situation: talking to her about what would be reasonable ground rules. You already established ground rules about communicating with each other if one of you develops feelings for someone else, and she appears to have followed them; now figure out what the boundaries should be to maintain transparency going forward.
Those rules need to be reasonable, though; something like "promise me you won't spend time with him alone" is much less controlling than "don't ever see him again," and totally reasonable given that she could do literally anything behind your back and you'd never know anyway. She did say, after all, that she doesn't want to make things awkward with mutual acquaintances. You'd be being respectful of her; she'd be respectful of the need for boundaries with this other guy that she's admitted she has a crush on.
I think you're the only other person in this thread up until now who supported my point on this. Great post, great advice. Theres a is very, very, very big difference between "don't have dinner with him alone" and "DON'T YOU EVER LAY EYES ON HIM AGAIN".
EDIT: "cease all contact" includes social outings where he happens to be attending, which is very disrespectful towards her friends because she puts them in a position to choose between her and him, too, maybe completely destroying her social circle. There has to be a middle ground that does destroy neither the relationship nor her social contacts.