My friend had one of these children, and it wasn't for want of her trying to stop it either. He was an absolute NIGHTMARE. She did just about everything she could to stop him, and there was a time where we were literally helicoptering over him in an effort to intervene before anything happened, and it was exhausting. She'd had number 2 by the time he got to his worst and I stuck by her because she wouldn't have been able to go out the house - I would supervise him whilst she breastfed her youngest, etc just so she could go out.
My son was a target for him, as he never hit back (for some unknown reason - not my parenting, just his nature). She did go a bit crackers at one point and suggested that my son was the cause of it because her son always "got a reaction" from my son, but at age 2, if you get bitten, scratched or hit, you do tend to cry, so we had a rational discussion about it and she admitted she was clutching at straws but felt he was better when my son wasn't around. I withdrew a bit for a few weeks and she sought me out to say she was wrong, and that it wasn't in fact my son, and that she was so overwhelmed by the whole thing that her views were jaded.
At one point my husband said that he didn't want me and my son socialising with them, at which point I told him that whilst I valued his opinion, he did not get to dictate how I spent my time during the day when he wasn't there (or in fact the time when he was). Not that this is really what he was trying to do - though I think if I said "ok then I won't see them" he would have been pretty happy with that!
Things eventually calmed down and he is now a fine young man and the friendship with the mother and indeed the family as a whole has endured.
Different for you, of course, if she really is doing nothing to stop this, and not supervising. Does she NEVER tell her off? Does she never supervise? If not, then things probably won't change in the short or even medium term and you might find life is more pleasant if you avoid them, which is a shame but you have to take that into consideration.