Was your great grandma from Shetland, Alegrias2? I believe that they would walk along knitting while carrying the peats home (and no doubt the baby too), as they had to make full use of time when the knitting was a way of earning money.
She was from the NE of Scotland Wheniwasyourage, but I think there was a lot of connection between there and Shetland because of the fishing. She was one of the women who travelled around the country following the fishing fleet, and they would gut the fish as they were landed. So they would knit as they walked to and from their lodgings and when they were waiting for the boats to arrive, full of fish. Just as you say, to make full use of their time to earn a little bit of money.