I'm a bit of a private property absolutist and while I might not like what's on the other side of my property line I deeply respect the fact that what's on the other side of that property line is not mine. I think your offer to pick up the tab and provide a solution for her in regards to a fence extension is absolutely fantastic on your part. Kudos for that.
I also think these tenants declining to rent there is complete BS. First of all, its not like this is some dilapidated "Breaking Bad" RV that looks like it's used for cooking crystal meth. That dried up gray fence is far more of an eyesore than that RV! Second, it's highly unlikely that a prospective tenant would know that this is a permanent fixture.
The tenants were hoping to get the rent lowered, rented another place and wanted to sound nice to that landlord, or they were being honest and someone missed out renting a place to what is likely a highly demanding privileged little princess of a tenant.
BTW my 3rd SFR rental has a house next to it with an RV in its driveway. The tenants and I commented about it among ourselves a couple times but aside from the novelty of that it has not impacted anything whatsoever.