Sounds like my mom OP; she has very clear ideas of what is right and wrong for everyone, including herself. It became worse with age, but she was always like that. It would have never occurred to her that Croc doodads would be special to your daughter, and since they are not "special" to your mom she is disturbed your daughter would pick them out to remind her of grandma.

My mom would have had the same exact reaction.

Rigidity in older age + not understanding the kinds of things that little kids like (too far removed in age and social norms of little kids). Change the subject if she keeps trying to bring it up.

The Grandma show and also Grandmother wants granddaughter to want what grandmother wants granddaughter to want. "Oh, Grandma wants me to want a shirt? Then I want it because it is what'll make grandma happy. She knows I love her because everything I do is based on her."

My mother does it with me, "I want you to want to take me to my fifth doctor's appt in 2 weeks.". Told her that pretty much no one "wants" to take anyone to a Dr appt, it is done because it needs to be done. Actions speak louder than words.

All the talk about people having a "love language" I think
my mother's love language is all of them.

She’s controlling about gifts because it is her way of connecting with people and maintaining that connection. She wanted to give a gift that your child would keep forever and be extra special- a token of their time together. When your child picked something that would inevitably be thrown out in a year or so, it broke her expectations.

Never mind that people don’t keep souvenir gifts anymore. I think it’s hard for the older generation to understand that the younger generation is less sentimental about things and tchotchkes anymore.