Sorry but this is classed as abuse - if a foster carer cut the foster child's hair without consent they wouldn't have the children, as the parents (rightly or wrongly) have parental responsibility for the well being of the children.
Having messed up hair and therefore liable to be bullied is a form of abuse, intentionally or not, she knew you didn't want it cut so it is a form of power and control. This too is abusive. She did it to a child who couldn't say no, this too is abuse of power.
The fact she did it to your niece and didn't learn that it's wrong indicates to me that she sees herself as having higher authority than the parents. In a court she would be seen as being wrong (I am not suggesting you take her to court) .... but if you think I'm wrong ask yourself if your mum pierced her nose/ears without permission on a 2yr old ... or tattood her ... it'd be instantly seen as abuse of power.
For some reason "because it grows back" people don't take the same view with hair - but in the eyes of the law it is.