Another personal story - I self harmed badly when I was young, arms and legs are visibly bad, even nearly 20 years later.. But honestly, if I was trying to advise myself, I would say that although it is hard, you need to help her on her journey to accepting that as a part of her life and not being ashamed.
I got over hiding mine in public a while ago, but professionally it took a lot longer. It has only really been in the last year or two that I've stopped hiding things in my work environment. You almost need a "fuck you" attitude, of "I'm not going to be ashamed of my body, or the struggles that I went through" etc.
I don't think lying about it helps that, it just re-enforces the shame.
But equally, I don't think you need to explain it to a young child.
I would personally just keep it very vague. if a kid asked me, I wouldn't explicitly say where the scars came from, but I also wouldn't lie about it. I would just say that its something that happened a long time ago, or just brush off the question by saying it isn't polite to ask about people's scars, or something like "oh, those just came from a hard time in my life" etc.
Not lying, No shame, but also not exposing young kids to information that might upset them.