There is indeed a famous saying, which you quoted. Doesn't make it right. What happened to "honesty is the best policy"? Stop sticking to proverbs and act how you think is right and not how a few well-known words tell you you should act. Also, by being silent, you may be doing something - you may be inflicting psychological damage on the, ahem, "plastic" (a term which I've never heard before but which I'm sure is not exactly a term of endearment anyway. Care to explain?). This can be serious, long-lasting, and very well concealed, and may make her depressed, angry, and in a mood to get back at you. People in that sort of state can't talk about it to other people, generally. I mean you're probably not doing this - but it happens. It's happened to people I've known. Be careful.
I think she would rather you spoke your minds. I would. She might not even know she's treating everyone like crap - such people often don't. No one will have told her - especially not idiots like you who think everyone's either perfect or trying not to be. So she will have no way of knowing that she's out of order. You never know - you may be the first to tell her and she'll reflect on her ways and realise she was wrong, who knows? She might get offended, but you don't seem to care, and if she is that bad at taking criticism you'd be right not to. But don't just ignore her, that's the most childish thing anyone can ever do to anyone else.