I'd be careful about terminating them shortly after she questions where her child was. Could give the wrong impression...that you were not taking care of the child and now don't want her questioning what is going on. If you did decide to term I would ensure you have a good conversation about why and clear things up so she doesn't spread the word that you termed them because she questioned you.
I don't think anything is wrong on her part. I totally get how it makes you feel under the microscope. But, you're caring for her child and she is perhaps anxious about it. I don't think there is anything wrong with driving by the house during care hours. Weird perhaps, but it's just one, of few, ways that parents have to check up on their child.
We've all heard the horror stories of what can go wrong in a daycare. Can't blame a parent for worrying. They do need to do it in a respectful way though. She seemed to, by asking you for clarification and not jumping to the conclusion that something was wrong.

































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