I takes a lot of nerve to feel entitled to anything 'just because'. Kara has the right to do whatever she wishes with the clothing and doesn't owe Amber a reason or explanation. As others have said, often people will just try to argue your valid reasons and it's best not to give them the chance. If Kara said, "well your baby may grow faster than mine", Amber might argue "well if he doesn't, you can still give me the clothes". If Kara said, "I am saving them for future children", Amber could say "we'll give them back to you when you have another kid", ect.
I have a tiny DD who is 16 months and wearing 6-9 month and 9-12 month clothing. I have heard of 4 or 5 month olds weighing the same as DD. Of course if Kara's baby does grow faster than Amber's baby, that still doesn't give her any right to the clothing.