Looking after him 2 days a week is almost coparenting and must be reported to SS unless they were vetted too
No it musn't unless you think they are abusing or neglecting him.
An adopted child is no different legally to any other child, he is legally her child and provided she sticks to the law on not abusing or neglecting her child anyone she likes can look after him. He is just a child being looked after by his grandparents.
The rules on not being looked after by anyone who doesn't have a DBS check only applies to looked after children - ie before a final adoption order is granted.
If it was anticipated that they would be caring for him 4 days a week at the time of the homes study/matching process then they should have had a DBS check done or if they live with SIL (all adult living in the household need one). But weekends with the parent present is not necessarily "co-parenting".
If OP got her way and her DS spent as much time with the PIL as her nephew does would you expect her to get them vetted by SS.
Its relevant during assessment but not afterwards. If SIL is truly as big a witch as OP suggests then GP's might have stepped up their involvement due to concern over the grandson.
Discussing with PIL before you report your concerns about adoption 2 to SS is a very wise move. I wouldn't be surprised at all if they do not see SIL's parenting in the same light as you so be very sure that your interpretation of events is accurate.
Jealousy on behalf of your DS/DH that they don't get the same attention as your SIL/DN, whilst it might be a valid gripe of yours, shouldn't be allowed to colour your perception of her parenting. Take a long hard think about how you are interpreting her parenting because if you are right, you will have prevented a child being inappropriately placed but if SIL finds out who dobbed her in then she will never speak to either of you again (which you might prefer). So you need to be absolutely sure in your own mind that she really is as vile a person as everyone (apart from her parents it seems) thinks she is and so totally inadequate a parent.