I dont' really think that lady was meaning to be rude. (although her comments were.) that is just some people's way.
My son calls my yorkies ...'kick me dogs'...he is in no way wanting to be mean. he would never, ever kick a dog. he is a dog lover. he would perfer a much larger dog. and that is why he calls them 'kick me dogs'. Too trivial to raise my blood pressure for.
besides, the term 'rat dog' pertains to their ancestors profession. Now that is something to be proud of... I could never catch a rat with my teeth even if I wanted to.