Parents reacted poorly with my toddler

My parents were over my house playing with my 2.5 year old daughter. My daughter has a doctor kit with a little reflex hammer. She went up to my dad and gently tapped his knee with it and he began wincing in pain. “Owwww my knee! Owwww that hurt!” He could tell she was really confused but did it a few times. My mom stepped in right away and told my dad to stop. She got really upset at him and grabbed my daughters hand with the reflex hammer in it and hit my dad in the knee even harder with it! I told my mom “No, don’t do that.” I obviously don’t want my mother modeling violence in front of my daughter, and especially using my daughter’s hand to do it! My daughter then began to cry very hard to the point of hyperventilating. 😢 I’m not sure which incident provoked the crying, or if it was a combination of both.

I just held her and let her cry and asked why she was crying. My parents eventually left so I could calm her down. I tried to explain to her that her grandpa was just joking and being silly, and he wasn’t actually hurt...just pretending. All my daughter wanted to do afterwards was snuggle on the couch with me. I feel so, so bad and I’m upset with my parents too.

How would you feel about this? Would you think it’s a big deal or no? Also, do you think this would make any sort of lasting impression on my daughter? I don’t want her to be permanently impacted by this frustrating incident. I know things will happen throughout her life that I can’t fully control but this made me so upset.