Unless you don't care if she never talks to you again, I wouldn't bother with critiquing her parenting. I am an attorney and I have actually had a few cases recently where such discussions resulted in the moms brawling and someone going to jail. I am not saying you would do that but I don't think there is much that gets a woman as mad as someone else telling her she is messing up her kids. So proceed with caution.

Is she close enough that you can call her on it when it happens and it not be a big deal? Something like, "What the heck do you mean 'break her spirit'? You mean keep her from becoming a entitled diva? When she pulls that nonsense over a pair of designer jeans in ten years you'll wish her 'spirit had been broken' earlier"

I probably only have one friend I could do that with. Everyone else, I would just ignore it.