We don't have all the facts. Given what we know, had I been the responding officer, I would have told her that she was not under arrest. I would then have asked her to go inside a nearby building so that I could better hear her side of the issue. Once inside I would let her rant on without a public audience. This allows her to save a bit of face and removes her from the situation. Simple enough.
All too often these days, with militarized law enforcement and government determined "free speech zones" arrest is the only resolution to public confrontation.