If anyone ever touched my horse like that, I would go ballistic!! I am very choosy who handles my horse!! The fact that he will back up when you put his hay in, but then bites this girl when she puts the hay in is suspicious. She may have startled him, or like you said, it may be a trust issue. And if I had a horse who is a renowned biter, I would tell people to stay away from it! I am strongly against smacking horses, I never hit my horse and she is a sweetheart, and tbh, if anyone did do something like that to her, she would probably retaliate, because that's the sort of horse she is, if you respect her, she will respect you! So in a nutshell, no I don't think you were over reacting! Ok, i'll get off my soapbox now!
Tin hat firmly on!