Regardless of whether others think it's ok for her to discipline your child or not, it is upsetting you. I know you don't like confrontation, but I would say something along the lines of 'You're a deadset legend and the best friend a girl could have. I love you... please stop disciplining DS when I am right there to do it myself. I know you are only trying to help, but I find that it's better for DS and for me if I discipline him myself'.

Is she reasonable and approachable? I dunno, I don't mind confrontation!