Bad hot dog!

Three nights ago Olivia was finishing her dinner when Sheryl got home and made herself a hot dog. Livi was of course right there wanting a bite of it so Sheryl made her one of her own (cut into very small pieces).Sheryl told her it was a hot dog. Livi kept saying dog while pointing to the back yard. Sheryl corrected her and told her it was a hot dog, Livi the said hot dog a few dozen times while dipping her the pieces into the ketchup and eating it happily.
The Next morning Gracy (the boxer puppy) was being a bad dog and doing something naughty so Sheryl yelled out the back door "grace bad dog". Olivia hearing this ran to the back door and put her hand out expressively and yelled ba ho dog (bad hot dog).
I'm still not sure what to make of this but I think she may have thought that we feed her one of the dogs for dinner and she seemed ok with that. What do you think?