My mother did that! And it made me feel uncomfortable. It also made me feel greedy - "I want the still life painting, I want the Wedgewood."... It sounded tacky.
But that was not her intent. She just didn't want any fussin' and feudin' after she was gone. She wanted some groundwork made before that as to the material things my sister and I would receive.
So my sister and I wrote up lists of what we would particularly like. My mother sorted them out, and there was no problem later, and everybody was happy. I might add that she had us do this years and years before she passed away (she died two weeks before her 98th birthday). At that, there were still a whole lot of things to go through. My mother was definitely not a minimalist.
Old people think about the future, and they are well aware that the future includes death. You may not want to think about it, but she is thinking about it now. That's one advantage the elderly have over the rest of us, if they face the fact of dying. She's thinking that she'll be happy knowing her granddaughter has (or will have) the things she loves best to remember her grandmother by.
Do not get superstitious; talking with her about what you'd like to inherit won't make her die any earlier.
You might say, "Yiayia, I don't like to think about your dying, because I'm very possessive and I want you to stay here! If you really want to know, and it would make you happy to know, there are some things that I really love - but I'd rather not take them home right now. I'd be happier thinking they were still with you." Perhaps the conversation can go on smoothly from there.
Are there other grandchildren? She needs to do the same for them.
And yes, take your children to be with their great-grandma!