My DD and her cousin used to do this tandem crying thing when I babysat. One would start, the other would start and then each would escalate in response to the other crying. It was at the same time hilarious and totally frustrating. They will STILL do it sometimes, at 4.5 and 3. My DD still gets VERY frustrated when other kids are crying. She blocks her ears, gets very agitated, will yell "Stop all that noise!!!" etc. I think it's a simple reaction to the noise itself rather than anything deeper. Anyway, I would suggest giving your daughter a hideout of some sort if she doesn't have one, a place where the sound will be muffled, and she has comfort objects to snuggle. Even earmuffs might help. My DD is always much calmer if she has a way to control the situation. Hopefully that will help your daughter, too.