She is being an arse & it's really rude to post photos of other people's children without their or at least their parent's consent.
I lived with 3 kids for 16 months & didn't share a single pic because it feels really creepy to me.
In a world with predators, you have every right to control how, if & when anyone posts photos of your kid.
Glad you set some boundaries & called her out. Maybe she'll get some integrity & stop fronting. She'll probably keep being an arse though. :P
Family!
You just can't do anything with family! You are absolutely right though. I never post photos of other people's kids unless someone has asked me too if it was at a party or something and they say oh post that for me please it's great and usually I have only taken it cos my daughter is in it!