In the situation the OP was in, I'd stay out of it. The girl could have been a real handful or grounded for something she had just done, the mother might not have meant that she would literally punch her in the face, and well, older siblings can be bullyish. DH jokes with DSS by saying, "I'll kill ye deed!" Haha.... it's a Geordie thing, which now DSS says sometimes back to us, but it doesn't mean he would literally kill him, of course (or ever hurt him for that matter)! I think sometimes things look worse to outsiders than they really are, so it's hard to gauge it.
However, in the situation with the toddler in the mall, that is different. That was clearly physical abuse and definitely a time to call someone about it, though I might not have confronted the woman myself.
I once saw a man (whose backyard faces my mother's backyard with an alley in between) kick his dog in the stomach while wearing some pointy toe cowboy boots with what looked like steel toes on. The dog yelped so loudly, it was clearly painful. I was so mad, I ran right over to the edge of the fence and started cussing him out and told him he couldn't treat animals like that. He said it was his dog and he could do whatever he wanted, and I told him I'd call the police if I ever saw him do that again. In hindsight, I probably should have just called the police and not confronted him, but I guess the five foot firecracker took over... lol. It's always hard to know what to do in these situations.