First, I can appreciate you did not appreciate being called "hon". It also seems to me you could have been a bit more assertive there. "It's Mrs. Hansen, not Hon".
But, in all honesty, I'd rather be called "Hon" than some other names people have been known to use.

Second, I don't think they were intentionally being deceptive. Depending on a couple circumstances, I would be willing to change that opinion.
They did clearly state that the first person's sitting fee is waived.
However, it is deceptive in that they did say "NO SITTING FEE". I agree it should be stated "NO SITTING FEE 1st person"
I'm no so kind to them on the $20 value, however. Since you were there, you would know better than I, if they normally charge a $20 fee for the first person. If they do, no deception. If not, then it is.

I'd probably be upset also. I'd be upset at me, for having not read the terms; but, also with the fact they did not word the offer correctly. I'd probably not win my case, either. So, at that point I'd have to make a decision. Is it worth the price for the portraits, or should I have them keep them? Knowing me, it'd be their's.