I know she's not my child to parent, but this bothers me...?

My brother and his wife have a 2.5 yo girl. They are very strict. I once saw them her for not sitting up straight in her high chair. Now, he says, she is getting "very defiant". By that, he means she sometimes makes a grunting noise at them when she's mad at them. He said every time she makes that whiney/grunting noise (parents of toddlers, you know the one I'm talking about), they smack her in the mouth. My husband and I have a 2.5 yo girl also (just three days older than my niece), when she gets defiant, we take the "be mad, but throwing a fit won't get you what you want" approach and the "redirecting" approach. She is very well behaved. The only problem we've had is hitting (which started when she began taking allergy medicine and miraculously stopped when she stopped taking it, now she's an angel). We let her do kid things like play in dirt and she's great, happy, outgoing and very, very advanced. My niece is like a whipped pup. Iwant to cry. Am I overreacting?