We have a very sweet old lady who has lived next door to us ever since we moved to this house 7 years ago. She often in the past has popped in for coffee, brought the dcs presents and us runner beans from her garden. She wouldn't hurt a fly.
Obviously we haven't seen as much of her with the Covid situation, just the odd wave and me phoning to see if she wants anything from the shops. She doesn't as she has nearby family but it's an excuse to chat and keep contact.
She often waves at dcs as we plod home from school or go for a walk. The last few times this has happened, dd1 who is 6 has screamed and run up the road. It is really embarrassing.
Ndn has phoned to see if she's done anything wrong (no) and I have had several chats with dd to get to the bottom of why she has suddenly decided she's afraid of ndn. All she says is that she hates her and her horrible witchy face 
I've told her she's being very unkind, that ndn is a lovely person we've all known for a long time, that waving back and not being silly is the right thing to do but this is met with hands over ears screaming shut up.
My dd1 has always been a bit overdramatic but I honestly don't know how to handle this.
Am I being unreasonable to take a hard line about this?