***** NOT A TEACHER *****
Hello, Geunsely:
Ms. Dorchester has given us all an excellent interpretation of that expression.
I THINK that there are other interpretations, too.
Here is what I read in an Australian newspaper (online):
"Tell a friend,'This apricot slice is delicious,' and don't be surprised if you get a blush of embarrassment [my emphasis] and a mumbled disclaimer, 'Um thanks -- it's not my best effort. A bit dry, don't you think?' " -- The Courier-Mail (03/24/2014).
Based on that quotation (and on this one from the novel Death Comes from the Past by Raymond Dale in the "books" section of Google: "Edwina still had the good grace to blush [my emphasis] after a compliment"), I THINK that this dialogue shows another interpretation:
Mona: You are extremely handsome and extremely intelligent.
James: No! No! No! There are a million men who are more handsome and more intelligent than I am.
Raul (the next day): I heard you speaking with Mona yesterday. I congratulate you on having the good grace to blush when she complimented you so highly.
James: What do you mean?
Raul: I mean that you had the good manners to act embarrassed.
James