NTA I have a dog who also isn’t good with strangers handling him and ESPECIALLY picking him up. I tell people this when they come over but sometimes people still try and pick him up when I’ve turned my back because ‘they’re good with dogs’ or don’t take me seriously at the time, and when he growls at them they’re surprised and go ‘my dog wouldn’t do that’ and become defensive and blame the dog to preserve their dignity. My point is that people who do this kind of thing believe they are in the right and when things don’t turn out in their favour they become defensive like her blaming him for being ‘aggressive’ or threatening to have him removed when she put her hand in there. She probably felt even more embarrassed because people didn’t agree with her. NTA good on you for standing your ground