I actually prefer Margot over Margret, but my nana was named Margret (1) and (2) I have a friend that I like a lot, but don't see very often (though we are connected on FB) who just named his baby Margot last year. I have zero problem with people using my kids' names, but I know some people do get upset about it, and I love my friend.
Using it as a nickname feels acceptable, like dd3, she would be called both interchangeably I imagine. Dh hates nicknames, or name shortening. Which is really odd considering that he actually does it to his name...anyway. He's adapted with Penny. So we'll see. He doesn't know this now, but if the baby is a boy, he will have a nickname. I agreed to DH's name (his grandfather's, Julian) long ago, because it's very important to him. Its not that i dont like it, i just dont love it. But his grandfather HATED his name and went by his middle name his entire life. XD
I think grandpa would approve of my plans!