As I see it you have two options, speak to DM about it again, or let go and carry on.
Personally I let go and carry on. I have confidence in my abilities as a mother and my DC's are proof I am right.
My own DM used to be very critical of everything, she was very tactless, hurt my feelings no end of times over the years, but when my Dad passed away 13 years ago she changed. She realised life was too short to continually criticise me, and she tried really hard to stop. If she said anything out of order I would just ignore her and did what I thought was best for my DC's. No one apart from DH knows them like I do so I am the best judge on anything to do with them.
I appreciate your circumstances are different as your DM considers herself an expert on children. But you have to put your DD and your relationship with your DD before your Relationship with your DM. Anxious children need huge amounts of reassurance and unconditional love and understanding, otherwise their anxiety just increases. You know your DD best. Trust your judgement and your instincts. You are her mother, you are who she needs to guide and help her.
Don't compare her or yourself to anyone else you are individuals.don't treat her like other kids are treated she is an individual with her individual needs and you know what they are. YOU are her mother. YOU know best. Believe in yourself and your DD will believe in you and herself too.
My DM saw her sisters fall out with their DD's and go NC for years and she knew she couldn't cope with that if it where her and me. So she made an effort to keep her opinions to herself.
She now has total faith in me and my decisions. I never wavered in front of her. Never showed any weakness, just complete faith in my knowledge of my DD and her needs.
You need to be strong, consistent, confident, and stick to your guns. Be polite, thank DM for her advice, and then do want you think is right. Don't tell her she is right or wrong, just listen and ignore! Don't argue, just say as little as possible and things like, ' I appreciate you have lots of experience with children and am sure that has been a successful option for children you have worked with' be non committal. It works for me, but you do need to be strong. But just remember your DD is the most important person in all this.
Your other option is to confront her, but I can't see what that will achieve apart from another row, and your confidence taking another knock.
Take a stance, stand up and be strong. Rise above it. Be proud of you and your DD.