Unfortunately there really isn’t anything you can do in these situations except try to educate them on other ways. If you truly think there is abuse happening (dead rabbits, rabbits with matted hair or super long nails, wire cages not kept under some sort of shelter or cover, etc) you could call animal control, but simply having bunnies outside in a hutch or cage, and breeding them is not considered abuse by many people, nor are there laws against it. I sympathize because I just recently moved to a very rural area where not even dogs are well kept, rabbits don’t even make the list for pets. Just about every time we go out about town for shopping or whatnot we see a stray dog or two. My neighbors keep their dogs in the backyard 24/7, even a small Chihuahua. The only time I believe in outside dogs are for farm dogs, where their people are outside with them all day. Getting off track though…
Basically, it sucks, it really does, but all you can do is take care of your own bunny and try to educated others by sharing what a wonderful house pet they can make. Anger, telling someone they are wrong, or otherwise attacking someone for how they do things is not going to change how they feel. If you don’t feel you can be calm and rational in discussing her rabbits, politely tell her you are not interested in hearing about them because you do not agree with how they are kept and change the subject. You might also want to add that you are open to talking about transitioning them to house rabbits if they are ever interested in doing so. Keep the door open so to speak. I know I had some trouble with my cousin keeping/breeding rabbits for 4H. She doesn’t anymore, but she still has a fair number from that time that aren’t kept how I would keep them. I find it is best to simply not talk about rabbits at all. Our relationship otherwise is great, we simply disagree when it comes to rabbits. It is kind of like religion; a lot of people have different ideas about it and follow different ways.
On a bigger scale, if you want to help change the way rabbits are perceived by society, joining your local HRS (if you have one) and helping with adoption events is a great way to spread the word. Most people simply don’t know rabbits can be kept inside, use a litter box, and can be spayed/neutered. 30 years ago it was even more of a foreign concept. Progress won’t happen overnight, but if we keep working it might eventually be “weird” or unusual to keep rabbits outside, just like many more people think it is “weird” or unusual to keep dogs outside today. Some day it might even be somewhat of a taboo!