Maybe you've never had the pleasure, or it's different in other cultures, but having experienced plenty of it first hand, it's incredibly off-putting when people point/stare/or talk about you, especially if they do so in front of your face because they think you can't understand their language.
Children like to blend in and not be noticed as different (adults too of course, but to a lesser degree than children). The label itself is inoffensive, she just didn't like the fact she wasn't seen as just another kid.