It fits in the same category as “aren’t you special”. It is pretty good way to find out you are not acting properly in an elder’s eyes.

Sexism is not limited to men on the side of who does it (nor on women on the side that is the target).

I use "sweetie" all the time because I live in a house with 3 girls and no guys. It's a tough habit to break when I go to work.

My experience is different, the only people I've ever heard use "Sweetie," besides towards children, is older men being condescending towards younger women, making sure they know their place, and older men who use it towards younger women as a term of endearment unaware that it's usually used in a condescending manner. I've literally never heard an woman say it outside of speaking to children, however, I think it might be acceptable to use in the American South, at least stereotypically, I've only spent a few days in the South myself.

That being said, I believe this particular use was intended to be ironic/sarcastic. Though it ends up being just a distraction.