For what it's worth - I do think your DD was over reacting on that one.
I can't even count all the times that joke was made by various family members and friends (male and female) when holding my baby and they started rooting - so many people used to say 'no use looking at me' in that scenario. It's just a bit silly funny.
My SIL once said, about me, to my 3-4mth old nephew herself 'just because hers are bigger doesn't mean they're working'. Everyone just laughed. It's funny.
The film Look Who's Talking - literally made entire audiences all over the world laugh - when the girl with extremely big boobs, was cooing over the baby and John Travolta said to the baby - 'you thinking what I'm thinking' and the voice over of the baby said 'yeah LUNCH'. Can't remember but either way, it's a funny joke.
Think you were very kind to be honest - if I'd have said that as a response I think my family would have thought I'd lost my mind and they'd have told me straight up 'don't be so bloody ridiculous!'.
Reading the original OP's thread back I think I put alot more onus on the 'FROM ME' part.
But actually, people who fall on the side of 'over reacting' could be right - because that's an example of it's not what you say - it's how you say it. 'Look he wants milk from me' - if someone said it with the onus on the 'from me' - it would be weird as if saying 'he wants me specifically to breastfeed him because he loves me more'. Which is what I took OP to be saying. Obviously that's, in your DD's words, 'wrong on so many levels'.
But if just pointing out the baby is rooting - not weird.