"And me but then my dogs have always been well trained, I have good verbal control and enough awareness to spot signs of stress, I'm not sure that applies here."
Well no, because the dog already has the idea now that there's an issue with the baby...but my point was that, his suggestion right at the start was actually fairly sensible.
OP, by far, the vast majority of dogs are fine with babies, if there's been no previous issues with aggression, it's generally a friendly dog...just not trained, the dangers are not that your baby will be bitten, stood on or banged into, but not bitten - does that help at all?
I can understand if you're a bit anxious about your baby's safety, if you've previously lost a baby and you're a bit unsure about dogs, but you're accidentally creating a much more dangerous situation.
You need to either get your MIL to respect your anxiety (because if they don't see an issue with the dog, they're not likely to agree to shut the dog away for visits)
Or get them to do some work with you and the dog to create a better situation, a good longterm solution might be to get a dog trainer in, to work with you and the dog, if you suggest it as the trainer training you, it might go down better.