I obviously don't know your neighbour so can't know what she was thinking, and I do agree that she was being rude.
Having said that, I would like to make the following case:
I was once travelling by motorcycle with my partner when mine got too wet (it's a delicate little flower) and broke down somewhere in Austria. The mechanic refused to repair it because it had "been ridden in the winter" (???), so it needed to be recovered, taken back to England, all very time consuming and annoying. In the meantime, the RAC offered me a courtesy car - a Fiat 500.
Now I don't know why anyone would think a Fiat 500 is in any way an adequate replacement for a motorcycle, but whatever. I wasn't allowed to take the car to Croatia, which was next on the itinerary, so I was a little stuck but remembered I have friends in the South of Germany so my partner went on to Croatia and off I went to cross the Alps. In a bloody Fiat 500.
I don't even know how to describe the experience, except I felt like I was crawling up the mountain so slowly, I was probably going backwards half the time.
Once I arrived in Germany, having survived the very nervy crossing, the motorway experience was no better. Zero acceleration, to the point where it felt quite unsafe to try and overtake even agricultural vehicles so I was essentially just stuck in the slow lane.
I've also experienced the Fiat 500 using those car sharing / rent by the hour type services, and I found it to be an absolute nightmare. Performance aside (and I get that it's meant to be a little city car that's easy to park etc.), it was profoundly uncomfortable to sit in. I'm 5' 2'' so you'd think a tiny car would suit me, but I found it to be too small (elbows and legs forever bumping into things) and too large (very hard to reach pedals - how is it even possible!!!) at the some time.
Long story short, I have developed a rather irrational antipathy towards the Fiat 500, to the point where, in the months following my Alpine adventure, I'd should "another bloody Fiat 500!" whenever I'd see one in London. And there's a lot of them so my partner really enjoyed that phase. In my opinion - and I realise this is entirely MY opinion - the Fiat 500 is the shitest car ever made and I don't understand why it exists.
You can see this car is capable of stirring very strong feelings, and I just wonder if maybe, just maybe, your neighbour is one of Us - those who have been scarred by the 500. In fact, when I read your post, I thought "oh gawd, is she talking about me?" (then remembered I have no children).