HI Amy
If your dog is really unlike her normal self at these classes, then it is possible she is stressed and I personally would stop taking her just for the moment. HOwever she obviously needs to get along with other dogs - did it all start to happen after the other dog got in her face, or was she like it before?
She could just have been really scared, and so snapped, but depending on what happened exactly it is unusual for a Lab as Mattie has suggested.
YOu say you own her mum and dad - so do you know how the rest of the llitter are? Are they the same or different?
If the classes let all the pups off the lead together, this has to be judged carefully, as some boisterous and pushy pups can actually scare shyer pups, making them react aggressively through being defensive. When puppy classes became all the rage and everyone started doing them, many pups surfaced from the classes with problems because of too much free for all and rough and tumble. So you have to be careful who runs the classes.
It is oK to have off lead play, but it must be supervised very carefullly and the pups watched carefully. MOst pups do recover if they have been scared by another pup, but sometimes they will react by going a bit OTT :D (It isn't a good idea to have say, a pushy Staffie pup in with a Sheltie, as they both have such different styles of play that it could really scare the Sheltie if they are bothoff lead for a whole session.It's different when they are grown.)
If her mum and dad are fine, hopefully she will take her cue a bit from them and start to realise all dogs are not ogres. The fact that she runs away from other bigger dogs says to me that she is nervous rather than anything. Snapping at small dogs IMHO means she is unsure of them. if she was in your arms when she did this, that will have givne her confidnece to snap. If she was't in your arms she would have possibly used dog language to "get on " with the pup.
As it seems so unusual especially as her parents are OK, I would also consider a vet check up - I suspect the problem was the other pup in her face which set her off, but could also be because she is in pain - this is not unusual either! For instance she may have bad hips or be feeling unwell, and can cope at home but not elsewhere. At least a thorough vet check (and i mean thorough, not just a once over!

) will eliminate any physical problem so your mind will be at rest and you can then concentrate on the behaviour.
Best wishes
lindsay