I would first speak to your husband and say she isn’t following the boundaries set and say that you both need to have a word with her about this. As clearly your husband doesn’t reaffirm them which is why she is so comfortable doing so whenever you are around. My MIL we thought was going to be a problem but very early on we shut down her requests and now she even goes as far to show us things she bought before sending and will take things back if we don’t like/ don’t need. We had to be quite harsh and say if boundaries aren’t followed access to said child will be cut until people prove they respect our parenting decisions and so far no one has pushed them
I wouldn't 'relax', I'd set actual boundaries and follow through on the consequences of them. It sounds like you're just ignoring her stepping all over your parenting so she's never seen any consequences. If the boundary is that she can't take the child when you've said no, you go and grab the kid back when she does it and warn her that next time you're leaving. Then if she does it again you have to actually follow through or it's meaningless.
I agree with Caroline. It may be awkward, but it is not OK to carry on as you are. This way, she will learn the consequences of her actions, much like a child who does not listen.
If she leaves the room with your kiddo, follow her. There is no reason for someone to be that hell-bent on taking a child away from his or her parents unless they intend to do or say something they know the parents would not approve of. If she's trying to hold him when he wants to play, firmly tell her, "Please put him down. He clearly does not want to be held, and you need to respect that." If she gives him food after you say no, "MIL, I very clearly asked you not to give him that. If you can't respect my wishes, you will not be seeing my child."
As far as the rude comments, just look at her with a dead expression and calmly say, "Wow...what a strange thing to say out loud."
Oh my goodness! I’d put my foot down, you can’t have her walking all over you or she’ll do it for the rest of your life. Your baby, what you say goes. Have you spoken to your husband about how you’re feeling? X