You don’t like SIL. You sound resentful and judgemental of her career and life choices. You have sneered at her running marathons and doing stuff for charity and living healthily.
Your DH has made a comment that was off in some way. You weren’t there. You didn’t hear it, and you don’t know what he said. Your SIL was obviously quite upset and your own DM felt he should apologise. In absence of any information you’ve sided with your DH on the basis of him downplaying it and saying he can’t even remember what he said.
It’s possible both SIL and your DM have overreacted. Or it’s possible he said something inappropriate or upsetting and has underplayed it. You have no way of knowing which it is, but you’ve decided to side with DH in the absence of knowing what happened.
You’ve likely done that out of loyalty to your DH, but also your extreme dislike of SIL. Perhaps you were right to take that side. But of course there is the possibility you got it wrong. You don’t seem able to entertain that as a possibility though.
What is very strange is that you have then used this incident as a springboard for cutting SIL, and consequently your DB, out of extended family plans. You’ve made a very silly and pointed stance saying you don’t want to be around her. But you only have half the facts! You’ve taken exception to her taking exception, but you don’t know why she got upset. Only that you don’t like the fact that she did (because you cannot stand her by the sound of it), so have used this non event as the basis of trying to very openly exclude her. You’ve been quite dramatic and performative about it too.
Your SIL is faced with relatives that clearly don’t like her, a man who she is obviously wary of making an upsetting comment to her child and refusing to apologise, then a nasty attempt to exclude her from family events by performative non contact. So she has reacted and shared what she knows about your DH with friends. I don’t blame her. You’ve really pissed her off by the sound of it.
You don’t have to like her. Maybe she is an insufferable pain, but you’ve behaved as if you’re in a playground with the way you’ve treated her. She has snapped. And now you’re reaping what you sow, sadly.
If she had a secret about your DH which you’d wanted kept quiet, you would have done well not to make an enemy of this woman. Instead your jealousy and pettiness has got the better of you.
You have some serious reparation to do, not only with your mum friends to see if things can be salvaged, but also with your DB and SIL. I would start with a heartfelt apology if I were you. Some accountability and humble pie is where your head should be at. Though it sounds as though you’d rather accuse everyone who doesn’t agree with you of being just like SIL! Perhaps she isn’t the bad guy here. Perhaps you are. You certainly look that way to most other people. I would spend some time reflecting on that rather than being defensive.