Don't say or do anything you might regret and keep the lines of communication open! (See the threads about GPS cut out of their children's lives, and take them as a warning)
However, if you have said not unreasonably that you have a prior commitment but would love to babysit another time (even "offer" e,g, next week) I think you cannot be wrong footed. She may be out to cause trouble, but it takes two to quarrel. As for "keeping the children away" again, you may just have to live with that and pretend it is not deliberate. It may well not be! These young people all have busy lives, see their friends, have other commitments, she may just be being thoughtless.
If her baby is only a few days old, the poor girl is probably totally frazzled and sleep starved, she may have PND too.
Given the circumstances, I would counsel patience, offers of help/ shopping/ laundry/food/having the 3 year old for a bit , as acts of a generous spirit.