Since this is third-hand, we'll never know the details. But, the fact is that if what is related is accurate and complete, there should not have been an encounter between the two pax. Rather, the GA or the crew should have rearranged the seating to acommodate the disabled pax, if possible.
What we don't know is whether the disabled pax alerted the carrier to her specific need at the time of booking. The need here is not after all related to her disability, but rather to the size of the dog.
We also don't know if the disabled pax was rerouted in IRROPS or what else might have ocurred. And, we don't know whether any changes were made face-to-face, in which case the CSR making the change would have seen the size of the dog.
If it was reasonably possible to move the non-disabled pax to acommodate the disabled pax's needs, that was fine, but a decision to be made by the carrier, not unilaterally by any pax. The real risk here is that a sold out aircraft, the extra seat would have been needed for some pax and the disabled pax would not have been acommodated as the carrier's sole duty is to undertake "reasonable" measures.