It's unAustralian

I can't claim I wasn't warned.

Prior to our move, Dorcas gave me "Australia: the essential guide to customs & culture".  The book features a text box labeled "It's unAustralian" and the last bullet point reads:
"not to add an 'o' to your mate's first name (unless he's called Antonio, in which case you call him 'Ant')."

I pointed this out to Benjamin and he kind of snickered and said, "it's pretty much true ... and they're going to call Mateo Matt."

I forgot about this until a couple weeks ago, when meeting a friend of Benjamin and the wife of the friend.

Upon introducing Mateo to her, the WotF said, "oh, I'll never remember that. I'll just call him Matt."

She didn't ask "do you mind if I call him Matt?"; she told us what she was going to call him.  I didn't know what to say.  I was dumbstruck.  She was/is super nice and I didn't/don't want to offend her.  So, the question is, how to bring it up with her in the nicest, most respectful way possible?

I'm not new to such situations.  I've gone by my full name since 1992 when I started working in an office with another "Pam".  She was only 5 feet tall, so our coworkers referred to us as "Little Pam" and "Big Pam".  No one wants to be called "Big Pam", so I became Pamela.  That's what I go by, it's how I introduce myself and it's how I expect people (who haven't asked if they can call me "Pam") to address me.  Occasionally, someone will immediately abbreviate my name upon first meeting me, but they quickly realize no one else does and revert to "Pamela".  In the very rare occasions when this doesn't happen, I make a point to be alone with this person and quietly tell them I prefer "Pamela". 

Easy peasy lemon squeezy.

But this feels different.  She's made it clear this is what she's decided to do.  And, she has the culture to support her.  Do I just write it off as a cultural clash and get over myself?  Or do I ask her to stop?  And, if I do ask her to stop, how do I do it in a way that not only preserves the relationship (again, super nice + wife of B's close friend), but ensures a happy continuation of the relationship?

-UPDATE 27 August-
We visited with Friend and WotF yesterday.  Not only did she not abbreviate Mateo's name.  She practiced saying it over and over and apologized profusely for taking a few goes to get it right.  Hooray!

However, I'm still open to advice for future such situations.

K thx bai