I think the difference between myself and my mom lies in our attitude towards people we don't get along with, or who we feel have wronged us. My mom is the eternal peacemaker, so the fact that they refused to socialize with the neighbors for a period of about five years says a lot.
To give an example, my mom has a toxic cousin that I refuse to deal with on a 1:1 basis (I am cooly polite to her at family gatherings, but otherwise it's radio silence). My mom is constantly trying to "work on" their friendship because "she's faaamily!" which I think is ridiculous and a pointless waste of time. I am much quicker to wash my hands of people and situations, and she feels like I can be callous in this.
My mom's actions, while coming from a good place, often rub people the wrong way because she tries to please so many people at once. At the time of the incident I told her I was very angry with the neighbor. She said something along the lines of, "Being angry with her is very unfair because she didn't know all the details of the situation. You need to treat her politely." As I understood it at the time, the subject was closed. As an adult, I can see that maybe my mom was trying to not stretch out the trauma and ensure that I didn't go over and scream at the lady, or something like that. I wish she had offered a little more validation of my feelings, but the time for that is long past.
When I told her I didn't want ML at the party, there was a good 15 seconds of silence (via phone) before she said, "Are you still that angry with her?" I didn't want to get into an argument about whether or not I have the right to be mad/upset/not want to see her (because I know that's where it will go), so I told her I would need to think about it, then posted this thread.
I think my mom's actions regarding the party are unfair and wrong, and many people have posted that very succinctly. I am going to call her tomorrow afternoon and let her know I'd prefer a quiet dinner with family only, and that if she wants to do the big cookout, I'd prefer it not be billed as a bday party on my behalf. I think that will make things much easier, and honestly, if there was a big BBQ and everyone except ML were invited, it would be very obvious. I don't want to *punish* her for what happened, I just don't want to hang out with her.