Would have there been any way to suggest to her that she might want to learn more about cultural appropriation?
When considering how to approach suggesting someone may want to learn about something you need to consider:
how likely they are to already have knowledge of what you are suggesting they should learn
how likely they are to expect you to know about their knowledge level
The two things are somewhat tightly integrated, let me explain this a bit with some examples (both of these have actually happened to me):
In my professional interactions with people if someone I'd worked with for a reasonable amount of time (say more than a month) were to suggest to me that I might want to learn more about, say, coding I'm quite likely to get offended by this, why? Examine it against the above criteria:
I'm employed to do this, it would be extremely unlikely that I don't know about this.
They are encountering me professionally - not knowing that I'm a coder means they don't know the most basic facts about me.
So bearing in mind both of these things it's hard not to take such a suggestion as a slight - either they know what my job is and are suggesting I'm fundamentally not competent at it or they haven't bothered to learn the most basic of facts about professional-me. Neither of these possibilities are particularly flattering to me.
Now if the same person were to suggest I should learn more about, say Magic: The Gathering I'm not likely to get offended by this - examining it using same criteria:
It's not something that's particularly common knowledge
I work with these people, I don't play Magic with them, I've probably never even mentioned it in the office, so it would be unreasonable to expect them to know this about me.
So in this case I'm not offended - I don't expect people to accurately estimate my knowledge on things that they had no reasonable way of knowing about. I can quickly fill them in on my knowledge level and "no harm, no foul"
What happens if we put this situation through the same process?
- how likely they are to already have knowledge of what you are suggesting they should learn
For her knowing:
She's a sociologist by profession. The study of things like social identity, social inequality and beliefs, religion and race are very, very central to that subject. Add in that she is active in "social justice" domains in general and it's a concept that has been discussed heavily in mainstream media and general in recent years.
Against her knowing:
She hasn't mentioned it directly to you or posted about it on facebook.
On balance I think it's far more likely than not that she is aware of the concept to a reasonable degree.
- how likely they are to expect you to know about their knowledge level
For you knowing:
You're her cousin, and have a close relationship. You clearly know what her profession is.
Against you knowing:
She hasn't mentioned it directly to you or posted about it on facebook.
On balance I think it's far more likely than not that she would expect you to assume that she is aware it.
So how to approach expressing/raising your concerns?
Ask her opinion about whether she is concerned about it:
Are you concerned about whether [Child's Name] dressing up as a Native American crosses into cultural appropriation?
What are the benefits of this approach?
This phrasing raises the topic without any presumption that she hasn't considered that angle, and without giving any opinion of your own that might be potentially viewed as a judgement. And if she hasn't encountered the topic before or considered that angle it gives an opening for her to ask you for your opinion and if she does so that means you can completely side step any possibility of being seen to give unsolicited opinions. I've used this same approach myself many times to great effect.
Are there any risks/dangers to this approach?
Yes (but they aren't hugely likely):
Some parents are on a hair trigger when it comes to even the most tenuous of possible/implied criticism of their parenting, but I'd largely expect that if she was this sort of person you'd probably already know about this.
If the concept in question was clearly and obviously something that they couldn't be expected to know about it can come across as condescending, but that's extremely unlikely in this scenario if she hasn't at least heard the term she'd basically have to have lived under a rock.
Cultural appropriation is (for some people) a controversial topic and can engender strongly held opinions one way or another and there is a very slight chance of hitting a Berserk Button.
Would I say anything?
Candidly - No, I wouldn't have considered this even remotely to be cultural appropriation personally and I doubt it would have even registered with me beyond "child in the room playing make-believe".
I also would consider that even though the risk of it going badly wrong is slight I would consider the possible consequences severe enough that the cost/benefit of saying something wouldn't compute for me. (I'm also aware that I may be projecting here - I know that I would probably react badly to someone saying something, but I'm a very different person than your cousin).
The fact that I wouldn't say something doesn't necessarily mean you shouldn't, if it's something you feel strongly enough about.