I was shocked to read this, Luckygirl. I hope your GD hasn't been harmed. As a dog-lover, I cannot think of one reason to excuse your neighbour having an out of control dog, especially one that could have inflicted serious injury. Friend or not, she needs to take immediate steps to control and train her dog so that it never behaves like this again. That was not 'just playing' and it demonstrates her lack of understanding about responsible dog ownership. It's examples like this that bring down the reputation of careful dog owners who think ahead about what could possibly happen, even with tiny dogs who might get spooked and run into the road, causing an accident.
From a child protection perspective, there would be justification for informing the police so she could be visited and warned. It's not fair on the dog, either - another incident like that could result in it being taken off her.
Another Tory MP crosses the floor