A seondary effect of mastitis is domestic animals is scarification, which leads to tissue shrinkage. It is so bad in some milk cattle that they are sacrificed since they are no longer able to produce enough milk. Is your dog still producing milk in her other glands?
If she is the pups will be okay, but you might want to start supplementing them with Esbilac, a milk replacer for dogs. If she developed a systemic infection secondary to the mastitis she would be very sick, her skin would be inflamed, and the tissue would be red and hot. If it is just shrinkage it is normal body temperatue.
I cannot diagnose her on the internet but it just sounds like shrinkage.
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