Mil can be perfectably nice and sociably appropriate with eveyone she meets except me?
Her behaviour, including the fact that you appear to be a trigger for it, points rather than detracts from the possibility she might be ill.
Mental Ill health can be a beastie. In the sense it isn't always a fixed, tidy, "you either have control, or you don't" thing.
My late 2nd MIL was triggered by just a handful of people in the first 10 years I know her. BIL (DH's brother), me and FIL's sisters. So she could go from church (considered rather over enthusiastic, but a very willing helper and massively devout) to me/an auntie/BIL and in the short time it took her to get from A to B a whole new flotilla of behavoirs would sprout.
Like the unexpected Holy Water showers BIL and I (but never the aunty army) got. The only person she hurled holy water at in church was herself. And then in far more moderate amounts. Leaving out the whore/man who whores about "blessing" that BIL and I got with our dousing.
She was very very ill. And the Sainted Catholic v Poisonous Dwarf stuff was as much a part of her symptoms as the full blown psychosis was.
Later on, as her faculties failed, inhibitions collapsed and the illness took its toll, pretty much everybody got the treatment. So people believed me in the end. Which wasn't a great deal of compensation after 15 odd years of people hearing that I was a monster and believing it. But better than a kick in the teeth.
Or a face full of Holy Water 