I think whether or not I assign this as a calculated move to hurt the OP would be based on two things:
1. Past behavior (check)
2. The name itself. (unclear). I think that if Holly is an unusual name, or a less common one, that is different than if it is a name such as Ann, Elizabeth, Marie, Grace, etc...ones that are often used as middle names because they seem to go well with just about anything. In my family, these names are common middle (and a few first) names among cousins. My first name is the middle name of three of my cousins. And my DD"s first name (not that common), happens to be the same first name of one of my more distant and older cousin's daughter...something we didn't discover until a family reunion (which makes it different, I know). ETA: Just read the update and I wrote too soon....
So, if SIL took an unusual name she heard from the OP and "stole" it...she's mean (and seems means regardless of this). But if she picked a classic name that's used often, I might be more inclined to say this wasn't outwardly about the OP and the OP's feelings are more a result of past behavior that doesn't shine favorable on SIL.