Slimboy, I believe it was an acceptable substitute for the Tetragrammaton (following its use in the Aramaic Targums with Tiberian vocalization). I have Swete's Introduction to the Old Testament in Greek. It was first printed in 1914 and quite dated, yet still a valuable resource. In a footnote it mentions that according to Ceriani either Origen or Eusebius substituted II I II I for the Tetragrammaton in ancient letters. Prof. Burkitt insisted that the Tetragrammaton in the Greek text was always read as kyrios. Problem with this statement is that there was a difference in use of the Tetragrammaton by religious leaders and scholars and the man in the street, blurring the issue somewhat.
Here's an article on Jewish use of the Tetragrammaton you might find interesting. One can only understand its use by ancient Jews if you understand the halakah or tradition of the Divine Name, guiding them. Old and worn Biblical MSS including the Divine Name had to be disposed of by ceremonially burying them, e.g., the Cairo Geniza MSS. They were not allowed to burn them.
YHWH in Nonbiblical Texts of the Dead Sea Scrolls
In some of the Hebrew scrolls the Tetragrammaton was written in red ink or an easily distinguished older type of Hebrew. J. P. Siegel commented: "When the Qumran manuscripts were first discovered more than twenty years ago, one of their more startling features was the appearance, in a limited group of texts, of the Tetragrammaton written in paleo-Hebrew characters. . . . That this practice signifies a deep reverence for the Divine Name(s) is almost a truism."- Hebrew Union College Annual, 1971.
Here Rösel reminds us that the Qumran covenanters – as far as such may be judged – did use the divine name in nonbiblical texts as well. We can therefore find the Tetragrammaton particularly often in the Temple Scroll and in noncanonical Psalms (see 4Q380, 381; 11QPsalms a, here in Paleo-Hebrew characters as well). The same usage can be found in other texts based on biblical materials, such as 4QReworked Pentateuch a, c and 2QApochryphon of Moses and David, or in the Sapiental work 4Q411. 4QJubilees a, dating from the second century BCE, proves that YHWH was in use even at that time. Therefore, one cannot claim that the Tetragrammaton was avoided in early Hellenistic times, nor can its use or nonuse be utilized as an isolated piece of evidence for dating or determining the origin of a scroll. It has to be stated that there obviously had not been a general agreement on the presentation and pronunciation of the divine name. [i]
As seen, the Tetragrammaton (in certain cases also the word ’l [God]) is written in Palaeo-Hebrew characters in the midst of a Square text. It has been suggested that ancient letters were used in this way here out of reverence, the implication being that they were regarded as more holy than the Square script. However, in some of the Qumran MSS we find that the Tetragrammaton (and the word ’l ) are written in Square script. Why was that?
Can this seeming contradiction be explained by the nature of the MSS themselves? The difference between the groups is self-evident: The use of the Square Palaeo-Hebrew characters in the MSS is restricted to non-Biblical works, while Biblical books are in Square script throughout. Surely, the scribes would not have shown less reverence in Biblical MSS than in the others?
The explanation that the ancient alphabet was employed by them out of reverence cannot therefore be right. Such an idea would not have entered their heads. They were simply acting in conformity with the hlkh. Except on certain specific sectarian points, their hlkh was the general one. The hlkh concerning the Palaeo-Hebrew script is known to us, and it explains the above-mentioned seeming contradiction. It was Prof. M.H. Segal who first realised this, pointing out that the Palaeo-Hebrew alphabet was used "lest the sacred name in Square script should render the scroll sacred, for the Palaeo-Hebrew script was at that time regarded as a profane script, as it was said in the Mishna" (Yadayim, ch. 4, m. 5): ‘[Palaeo-] Hebrew script does not make the hands levitically impure [does not profane the hands]' i.e., it has no sacredness whatsoever. In other words: the inclusion of the Tetragrammaton in Square letters would give it the status of a Biblical MS, i.e., it would become sacred, and problems of levitical purity would arise for its users. To obviate that, the Palaeo-Hebrew script was employed for the Tetragrammaton. [ii]
[i] Encyclopedia of the Dead Sea Scrolls, L.H. Schiffman, J.C Van Der Kam, editors in chief, Oxford University Press 2000, volume 2, p. 601.
[ii] S.A. Birnbaum, The Hebrew Scripts, E.J. Brill, Leiden (1971), Part one: The Text, pp. 63, 64, 73.