At his age, I doubt there is much you or they can do even if they wanted to. I would however, let her know that she didn't do her child any favors by abdicating her discipline responsibilities.
You don't need to hit a kid to get them to behave, but you do need to instill consequences for their actions very early. It's mostly simply tone of voice.
My niece is 6, and because her parents would tell her not to do something, but not stop her or punish her if she did, she now needs to be told 4 or 5 times before she'll stop doing something.
My nieces are over here a lot. Since I've been around them a lot since birth, and scolded or disciplined them when they were out of line at my place, they listen to me when they won't listen to their parents. There's no downside, I still get 'jumpy-hugs' (ie they run and crash into me) when we meet.

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1984 300TD