Tricky situation!
I'd talk to the teacher or the director and try to find out more about what happened. Maybe your DD is absolutely right and the teacher did bend her fingers backwards but it was a (somewhat understandable and once off) accident. Maybe she did it deliberately in which case I'd say a complaint should be made whether or not you are leaving. Maybe your DD's version is skewed as Sagres says.
I guess since you've already made the decision to leave then at least you won't have to deal with the ramifications of questioning this further. If you do look into it and it was an accident or a skewing you can just apologise for the confusion and leave anyway, if it was deliberate you can put in your complaint and leave. Either way you don't have to deal with the teacher afterwards, which could be awkward after such a history with her son and then this.