Definitely not over reacting that's so not okay to deliberately cross your boundary for your child
I think you're over reacting on him. Like you said, he didn't post them. If she claims she didn't know, then why not give her the benefit of the doubt? Should he have said to his wife to take the pictures down once they were posted, absolutely, but he doesn't control what she posts so I wouldn't hold it against him. As long as they've since taken the post down and respect your boundary in the future I would let this go. You can't change what's been done, you can only move forward. I don't think it's wrong for them to have a difference of opinion on what they would do with posting pictures of their babies on their Facebook. As long as they respect your boundary in the future thats all that really matters moving forward
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Everyone has a right to privacy, especially children. No one has the right to post images of your child on social media without express permission. She is in the wrong whether you'd already mentioned it or not.