My mother-in-law says “一百岁！” to my daughter whenever she sneezes.

Rules of etiquette vary between cultures... In North America, "Bless you!" or "Gesundheit!" is said even to strangers as a courtesy. In China, expressions like “一百岁！” seem less common with people the speaker is unfamiliar with.

Polite expressions in Chinese (called 客套话) are often different from what we say in the West. If you live in China, you've heard these a millions times, sayings like “辛苦”、 “慢走” etc. Using familial relations for older strangers (阿姨，叔叔, etc.) would be another example.