AITA for wanting to set strict boundaries with a friend that wants to “save” her dad?

My wife and I have a close friend of 10+ years, who we consider family. A couple of years ago, she discovered her dad had inappropriate child content on his computer. She cut ties with him, informed her family, and attempted to report him to the police, but they said there wasn’t enough evidence to charge him (according to her). We fully supported her decision, understanding how difficult family rifts can be.

Now, me and my wife are brand new, first time parents, we’ve ensured our friend is deeply involved in our child’s life, treating her like an aunt. However, a few days ago, she told us she decided to reconnect with her dad. When we asked why, she explained that no one should go through recovery alone and she didn’t want him to spiral. It seemed she was keeping him at arm’s length but still contacting him.

Out of caution, we asked her not to keep photos or videos of our child on her phone or post anything about them on social media. We thought this was a reasonable ask, but she was deeply hurt, crying and accusing us of no longer trusting her, considering her a threat. We reassured her that we still love her but also need to prioritize our child’s safety. She then argued that accidents happen, and we were putting stipulations on our friendship with no guarantee that anything bad would happen. This confused us—she seemed to be implying we should accept the risk rather than take precautions.

The conversation escalated when she said she planned to spend more time with her dad to “save” him. My wife told her that if that happened, we wouldn’t feel comfortable remaining close. What if she was with him and unknowingly shared something of our child? We are already cautious with social media, vetting who sees our posts and covering our child’s face when necessary. How can we trust someone who chooses to be around a known ped0phile?

We turned the situation around, asking how she would feel if we reconnected with someone who had harmed her. She deflected, saying she’d ask how we were feeling instead of immediately trying to set boundaries. She accused us of acting out of fear and focusing only on our child instead of her. When we asked what could be done to ease our concerns, she simply said, “go to therapy,” and stormed out.

Are we the assholes for reacting this way? Should we have trusted our friend in her path to "save" her dad despite the risks? Were we overreacting? It feels like this friendship is at a breaking point because our values no longer align.