Stand up for your baby, its your house its your rules, Never ever allow some one to speak to your baby in that manner...
Because if you don't stand up and say something now it will just escualte to worse things, Screw what your inlaws think. Its obvious the inlaws already dislike you, so say to this ferral women that ' you are not to speak to my baby this way, your in my house'. And if she doesnt like it she can LEAVE..
And to your dh ( i hope he reads this):
This is your own child your allowing some one to degrade with such disgusting and inappropriate language. It's time to stand up for your baby and wife.
If you don't stand up soon it causes massive strain in the relationship with your wife, and she begins to feel like you will never stand up for her.
And it's unfair for your wife to have to stand up to YOUR family all the time, it;s up to you as the man of the house to say something.
My dh never stood up to his mother & sister when they degraded me in front of other people and it caused massive strain in our marriage, because i felt like no one was on my side. I felt like the inlaws had free rain to walk all over me and the children.
Every time i said something to his mother or sister i was wrong, being nasty etc, but when he stood up to his family it was fine and they got the message.
Fast forward three years and we donot have any thing to do with the inlaws because of a legal matter, and at the end of the day my dh stood up and said enough is enough and my wife and children are not going to be treated this way, and if you donot like it mum/ sister then donot bother being in our lives..
Im not saying do this im jus trying to get your dh to stand up for you and your child NOW , not when things have got worse..
At the end of the day, you make sure people in your life donot treat your children or you with disrespect.
all the best