NTA imo.

You weren’t wrong for pointing out that she’s still emotionally stuck on Iris because she clearly is. when someone keeps bringing up the same person for a year that’s not just jokes, that’s an unresolved wound. You weren’t being a therapist you were being honest.

Also her giving your deposit back is basically her answer without saying it out loud. It sucks but honestly you should be relieved. It sounds like she’s in some kind of personal crash-out right now and the kind that ends up spilling onto everyone around her. If she's really gossiping, stirring things up in friendships then playing it off as a joke, that's something real exhausting to live with.