Is this response appropriate?

Some time back I came across an online exchange between two friends. It went something like this:

A: Sweetie, you are so beautiful! (Commenting on her pic)

B:Look who’s talking!

Of course, B meant that A was more/ no less beautiful than A.

But I think we say look who’s talking in reply to someone’s critical remarks about someone else.

Can we use it in situations like this one? If not, what’s an appropriate response in such cases?

Thanks!