That's because instead of simply hollering "Language!" before reminding herself to check her own like a sane person, she comes to the insane conclusion that for some reason, the people of Milborough will despair of G-d if Elly Patterson's children are known to curse. This panicky overreaction based on a foolish over-estimation of her own importance to the world leads her to making a sweeping change in daily routine without thinking through the broader implications. She has decided something and they're just supposed to live with in and thank her for being a presumptuous, self-righteous and unyielding idiot making a bad decision for a stupid reason.
This leads to her getting all huffy and stupid when it becomes obvious that her very clever plan to save someone who doesn't need saving from a calamity that doesn't exist isn't working. For some reason that angers and baffles her, Michael isn't happy about being made into a puppet because he has inconvenient emotions that stir in her the forbidden feeling of remorse. The more Mike tells her that she's being unfair, the more she digs in because she doesn't have the strength of character to yield when she doesn't like the person she's being unfair to.
When she realizes that she's unpopular with someone she wants to like, on the other hand, she folds faster than Superman on laundry day and feeds into Mike's belief that Liz is an only child but someone forgot to tell him that. Good thing for Mike that Elly is starting to hate Liz too now that she has a personality that starts to conflict with her own. That way, they're both the target of infantile and hypocritical rage.