Responding to someone's apology by saying "I'm sorry" even if you did nothing wrong is a common social courtesy, and it is not considered inappropriate in most situations. It's a way of acknowledging the other person's feelings and showing empathy. By saying "I'm sorry," you are expressing that you are sorry they felt hurt or upset, even if you weren't directly responsible for the situation.
This type of response is often used to maintain a positive and empathetic atmosphere in the conversation and to let the other person know that you understand their feelings. It can help prevent defensiveness and foster open communication.
Of course, if the situation is more serious and requires a clear distinction between right and wrong, using "I'm sorry" in this way might not be appropriate. However, in everyday social interactions, responding to an apology with empathy and understanding is generally considered a polite and respectful way to handle the situation.