Do you think my coworker overreacted?

My coworker was on the phone arguing with her husband and she called him a "Waterhead" and I laughed at it and she got very pissed. I tried to apologize to her and she still wouldn't talk to me, well she was the one using the word so don't get pissed at me for laughing because you used it. I thought she Meant it playfully like some people do dork, geek, butthead, or even sl#t or who*e at times. But my other coworker laughed too and she didn't get mad at him. So what the hell?
Do you think my coworker overreacted?
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