So, just reading this is very confusing. It sounds like you are trying to take a real life example and make it hypothetical to get opinions on what is right/wrong in the situation.
Bullying on any level is wrong, and leaves many mental scars that don't go away quickly, like physical ones. Perhaps you might add a little more information, and less x's and y's and we could support you a little more?
One thing I'd like to add is that bullying is about power. It can be done by any size of person to any other size of person so long as they can assert power of some kind over the other. Therefore the only way the bully can still hurt someone is to still have power over that person. This includes knowing that they are causing emotional reactions in that person. One of the most pathetic things in the world is to see a bully who has lost all their power over others.