People are going to give your kids gifts you don't love once in a while;
As the childless (honourary) Aunt, it's practically my job to give the kids gifts the parents are going to hate, isn't it?
When giving gifts to kids, I generally go by the ages on the package. If it says '7 to 9 years old', I'm not going to give it to a 5 year old. Likewise, if it says '2 to 4 years old', I'm not going to give it to a 6 year old.
Nail polish to a 10 year old seems fine to me; the 6 year old might have been pushing it if she was an only but with her older sister to help her? Seems OK to me, too.
I'd give a jewellery making kit, in the appropriate age range, so that they should be able to do it with minimal supervision. I probably wouldn't give a chocolate making kit, though, because of the added supervision (and cleanup!) necessary. Although when I helped with the shopping for a kids Christmas party, we gave away some of those kits. A parent told us later that although it had been a bit of a pain, their kid had so much fun and gave away the treats as Christmas presents that it was totally worth it.
If the mother had drawn the OP aside later and said, 'You know, something like that can be really messy, especially for the 6 year old, and I have to supervise more closely than I'd sometimes like to. Could you keep that in mind for next year and get something less messy?' It would have been fine.
Edited to correct a word and to add:
OP, would you see the girls any other time? Would it be possible to give them a gift that you would do with them at a later date? So if you gave them a crafty type thing, the girls would have a date with Aunt cocacola on the first Saturday after New Years to make whatever it is. Make all the arrangements - picking them up, aprons for messy work, dropping them back off, etc. Mom will probably still find something to complain about but then you know that you did everything you could to make it fun for the girls and stress-free for their mother.