I didn't really want to answer this, but if it's bothering you that much then here goes.
If your uncle is not a 'real' uncle, in other words, he's not actually related to your mum by blood, then you may not like it, but there's nothing really wrong with it-aside from doing it in front of you that is.
If on the other hand, he's your dad's brother, then that might start getting complicated, regardless of whether you're there or not. However, since I don't know the situation, I can't say any more than the fact that it could get complicated.
The third alternative is that he's your mum's brother and that's complicated and wrong for so many reasons, regardless of whether you're there or not.
I'm not saying she can't or shouldn't, whichever of the three alternatives above fits the situation, but I personally wouldn't get intimate with someone if my daughter was watching.