Really, I'd let this one go and promise yourself that next time you'll say "thanks Sis, we've got this under control." It sounds to me like the time she jumped on you for 'correcting' her child was several years ago. This incident is slight. If this is a bigger pattern of behavior with your SIL, then think about what that bigger pattern is that you're worried about.
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I once yelled at a friend's child. I was horrified the instant I did it, but it was a visceral reaction to an unsafe situation. There was a pinata, and the child darted through the pinata area to pick up some candy just as an older child was getting ready to swing with a bat. It's possible to overreact innocently enough. If SIL was in 'parenting' mode or was 'protecting' her little brother, I could see it happening without any other agenda on SIL's part.
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The 'work' that you need to do is to figure out of SIL has an agenda, and if she does, whether ignoring or discussing it is the best you can do.
