Rude sister or overreacting??

So, my sister is on her 2nd marriage but has kids with 3 different guys.  During Her 2nd relationship (no marriage) she had one son with. The dad is my daughter's God Father. She has since gotten married to the 3rd baby daddy.   So if I ever see the 2nd guy or he's picking up his son for a visit and I'm there, I say Hi to him and how are you doing. That's all. Nothing more. 
(I've been married for a long time btw). 
Well one time we were having a family get together. And he came to get his son. I didn't go say Hi because I was busy with my daughter. So she says in front of everyone, oh, I'm  soooo surprised you didn't go say Hi to him!!  In a real bitchy way. I ignored it atm, but I was so  upset!   Since  my Mom didn't hear it, I told her in front of my sister what she said to me.  My sister then says I'm always getting in everyone's business. I'm like just because I'm nice and say Hi to him, I'm getting in your business?? And she said yes.  Uggh I'm so upset about it and we don't really ever talk anymore.   Am I overreacting or was that rude of her??