It is normal for a dog to shake a smaller animal in order to break its neck. That is how a lot of wild canids kill small prey. My friend's golden retriever does the same thing to squirrels that he catches. And I'm sure many of your dogs do the same thing to their toys. People have bred dogs to help them in the hunt, but now that we live in Suburbia and those skills are no longer needed, dogs who use them become "vicious killers".
It if a dog's normal behavior makes it a potential threat to other domestic animals, people, or anything else that is a part of normal, everyday life, you take steps to prevent it. It's part of responsible dog ownership. That's why APBT owners take such care with their dogs. Or why terrier lovers do not let their dogs play off-leash in the yard at the same time the neighbors are letting their pet bunny rabbit run around.
Yes, this whole thing could have been prevented with advance notice. But everyday people on walks don't give advance notice. What happens if a passer-by is taking their toy poodle for a walk, on a leash, and Rudi doesn't like it? And what if she kills the little dog next time?
If your aunt reports this to Animal Control, that's one strike. I don't think anything bad will happen, but it'll be on Rudi's record. But if Rudi does this again, I don't think her chances are good.
It's already been mentioned that Rudi's responses are not under verbal control. So she needs to be under physical control. What's the harm in putting your dog on a tie-out when she's in the yard? I don't understand why the OP seems to be unwilling to take a simple precaution. You can try to excuse Rudi's behavior all you want, and you may be right. But all the excuses in the world won't matter if this happens again. It can result in Rudi being euthanized, plus legal action against you. So why risk it? Isn't it better to err on the side of caution?