Ravishankaray If the council has assured you that it's not an exercise area and is showing no concern, remind them of their legal obligations of failing to act. They know about the situation(no signs), it seems like their duty of care towards people(and dogs) frequenting the park is not being fulfilled. Put it in writing and ask them to acknowledge the receipt of your letter/email.
"Any member of the community has the right to question actions and processes of councils, ask for explanations, suggest better ways of doing things, and ask for a council's decisions or actions to be reviewed. These issues may relate to dissatisfaction with a decision about a council's policies, procedures, services, or fees."
It's important we all share public space in a friendly manner. The reaction from the person you encountered is typical. Justified, you will act with emotion and likewise them. Ends up in 'park rage'! At least a sign will give you a legal starting point with them. But, common sense from her would have went a long way. People, some belong on a leash LOL