My youngest daughter has Cerebral Palsy, "spastic" is still current usage and not offensive when used to describe hypertonia (muscle spasm, stiffness and rigidity) in people with cerebral palsy, Drs and physios use it all the time. There are three main physical types of CP, spastic (hypertonic); athetoid (uncontrolled movements) and hypotonic (lack of tone/floppy). People can exhibit a combination. Most people are more familiar with spastic CP so when describing my daughter's condition to new HCPs I will often say "She has CP with severe global delay but she is hypotonic, not spastic."
It is possible that the poor woman was using the term in a casual construction "go spastic" but accurately, not perjoratively. Spasticity usually gets worse when people have over-exerted themselves or are distressed.
The fact that she is funny and sarcastic suggests that maybe she does use a degree of black humour, I have some sympathy. My dad was great but always jokingly called me "Fred", "Face-ache", "Madam Mim" rather than "Princess" and the like. When I whined about my brother saying something horrible, he'd always respond by mock-rebuking him with "Don't mock the afflicted!" I have no disabilities and I always knew it was affectionate. When I got into Cambridge my mum was furious that all he said was "Well you can't be as stupid as you look.", but it was obvious that he was thrilled beyond belief and was joking. Unsurprisingly I tend not to be saccharine when describing or responding to compliments about my own children. When people gushed about DD1 as a baby I'd sometimes respond as my dad would have "Thank you, she's not sooo bad, I think we'll keep her". Naturally I occasionally did the same about DD2 without thinking, - until the day her two Physios both gave me a very strange look and it dawned on me that it could possibly be taken literally given DD2's severe disabilities.
I adore both my girls and do praise them both liberally to their faces and we are very close. I also affectionately take the piss out of them at times which they find funny. I still often mix deprecation when communicating their successes. "She's great and doing really well at work [DD1], she's still a messy bastard though! You wouldn't believe it!"
Using spastic as an insult is awful, but there are arguments for reclaiming words descriptively. Even if it was a bad slip, she doesn't deserve to be ostracised, she clearly picked up on her own misjudgment. DD2 is as three dimensional, robust and complex as her sister and other people; just because she has disabilities, I don't feel that she can only be talked about or to in speshul, cotton-wool tones. I'll happily tell her 1:1 at school that she has been a little toad if she has.