It may help to remember that your colleague didn’t suddenly change, you suddenly noticed, and now know that she can improve. I have gone through a similar cycle a few times, and remind myself that if I’m thinking like a hammer, all I will see are nails.
You mentioned this is a small team. Is it also a small company? Is there someone you can get advice from to minimize your interactions? If you have a HR person, talk to him or her about your supervisor’s work practices and how they are impacting you. Communication classes are highly recommended for all managers in my company.