i think you need to calmly ask her what she meant by 'nursed'. it might be a miscommunication and she might mean 'swaddled, cuddled, held, sang too, soothed, etc' and not 'breastfed'.
if she did mean 'breastfed', then i'd make it very clear that thats not ok with you, and why. and then i'd talk to someone higher up about ensuring that its made very clear to her that its not appropriate, and doesn't continue to happen.
i can see how if she did do it, she may well have done so with her heart in the right place- it might be something thats totally ok in her family or close social group, and she might have done it without thinking. but that doesn't make it ok. its exceedingly dodgy healthwise, as others have said, and its way too close for comfort otherwise- especially without your consent. nothing should be administered to your child without your explicit consent- be it food, medicine, someone elses breastmilk, anything.
is this 'nursery' even on the level? if she's in a caregiving role, are her and her husband properly qualified, trained, insured, police cleared, etc? has a risk assessment/safety check been done on the area where small people are looked after? if not, it could have potentially been a lot worse. i'm not trying to be alarmist, but i know its its easy to assume, and hindsight is 20:20.