First, I would just try and speak to her about it in an open, honest, amicable way... without "criticizing" her per say... but address the BEHAVIOR... in a kind of 'neutral' way if possible.
If she is a friend...then you two can probably talk about it... perhaps she even feels what you feel...but then she doesn't not know how to control her boy.
Also yes, kids often copy their older siblings, for better or for worse. That is why when there are younger siblings in a house-hold...it is important that the older ones don't view their age-bracket shows/entertainment in front of the younger children. Toddlers, do NOT have the cognitive development to differentiate between "real" and "fiction." Thus, they copy. They don't even know social rules yet, AND they don't even have FULL impulse control yet... thus, a toddler cannot be expected to fully control themselves at-will. These aspects are STILL developing in a toddler.
My daughter's Preschool Teacher and her Kindergarten teacher echoed these same things... to parents. They have seen much-too-young children, already watching "teen" shows... and it negatively affects a Toddlers developing frame of reference. And its hard to then take them down a notch, once young children/toddlers get desensitized to these types of shows...
I would really have a conversation with your friend about it... and then as a "team" try to trouble-shoot it TOGETHER. Use the word "we" instead of "you" when talking to her about it... so she gets less defensive about it etc.
I would feel the same as you.... in fact, I once baby-sat a 2 year old in my home and my daughter was 2 as well... well this girl used to hit/scratch/push my girl and she was very physically "mean." So well, I stopped baby-sitting that child... it was causing GREAT stress in my own daughter, and I saw no positives about the situation. Yes, I did try and talk with the parents (who were very nice about it and even admitted their daughter was a "bully" and even at home). So, I gave it a few tries of trying to correct the situation... but this girl was just "wild" and hard to handle. The parents understood though. They knew their daughter was this way.
Now, you HAVE TO put your child first... at this age, they cannot be expected to understand wordy explanations. So you have to look out for him... and hope he does not pick up the habits you don't want him to. But, even if he were in daycare/preschool...these kinds of things happen too. BUT, there is a Teacher there to run interference between parents. But even a Teacher would understand.
At least your friend does try to do something... ie: time-out, holding her child in her lap, making her child say sorry etc. So, she does do something. But, it does not work. Partly, this is the way it is with toddlers...especially a very physical & aggressive one.
I would, just tell her that is it causing you much grief having your son be beat up on all the time. And, you can't stomach it, nor feel it is okay for your son, as he is picking up the bad habits as well. That is just me. But I would say this, in a more 'pleasant' way. Tell her that (and I"m sure she knows), that her son's aggressiveness is just a major problem for your son.... and you. That it is causing "stress" for your child. And that is not good, for any child. And if it were me... I would lessen the play date frequency or not at all, for that reason. You can always stay friends with her... but as just 2 girlfriends going out...by yourselves, if that is possible.
It's hard these types of things. But I would just be honest...
take care,
Susan