OP, first of all can I offer you and your family my condolences at this difficult and sad time for you. Losing a loved one is never easy, and for you to handling this and supporting your FIL and DH when you are 8 months pregnant, and from what you've said, the horrible circumstances of your MIL's passing, must make it even harder to deal with.
I think that you need to go along with what is best for your FIL, your DH and you because that is the only thing that is actually important.
Funerals are a way for the living to say goodbye to those who have passed on, and should facilitate the needs of that family. Grief and how people deal with it is different for each individual person and will be different depending even on the circumstances of how they have lost their loved one.
I think there is a general 'social' expectation that there is a chance for people to gather after a funeral to talk together with maybe some light refreshment (I've never been to a funeral where there were people there getting drunk or gatecrashing), but I also think the key thing is you have to do what feels right for you and your FIL.
The funeral is for him and for your family.
I was thinking back to when my elderly mother died about 4 years ago after a prolonged and horrible illness. My husband and I and our DC didn't feel up to giving eulogies in the service, so we didn't. We spoke to our vicar and she did that part for us. I'm sure that some people there would have been surprised or shocked even by that but we just weren't up to it so we didn't do it. We had a short committal service at the Crem, then people traveled to the actual service at our church where the churchwarden kindly did tea and coffee for us, then because we nursed my mother and she died at our home, we had refreshments back at our house in her annexe and our garden. Alot of people couldn't come to see her when she moved in with us because she was so ill, so it felt like the right thing to do and we just did a low key and relaxed bring and share. I've never been to a funeral where that's been the case before, and possibly some people might have been expecting a big formal proper do, but my mother hated big social gatherings and for us it felt right to do it low key.
Her illness had been hard and terrible for her and for us to watch, so I wanted to remember and celebrate on all the good and wonderful parts of her life. The gathering was a chance for us, the rest of the family and my mother's carers and friends to reminisce together and say goodbye to the person she really was.
BUT WE ONLY DID IT LIKE THAT BECAUSE WE WANTED TO.
IF we had been feeling like your FIL and DH are right now, then we wouldn't have arranged the funeral as we did. And I wouldn't have been bothered who liked it or not.
Anyone who is going to your MIL's funeral would have to be pretty self centered to not respect that he and the family do not feel up to a gathering after the funeral. Yes they are going to pay their respects and say goodbye, but they should also be going to support your FIL, your DH and yourself. And if he doesn't want something afterwards with everyone there, then those people should be supporting him with that.
My thoughts are do what is feels right for FIL and yourselves, don't have anything afterwards, but just tell people when you are letting them know about the date and time of the funeral that there isn't going to be a gathering afterwards as your FIL and the family don't feel up to doing that and need a chance for privacy afterwards. I'm sure people would not have any problems with that and will sympathize with how you are all feeling. If anyone doesn't understand then frankly its their problem which says something about them as a person. They certainly aren't going to the funeral for the right reasons.
If your FIL doesn't feel up to a private meal afterwards, then don't. But it could be a good way for you all to support each other and to let go with emotions that will be bottled up while you get through the funeral.
There is no right or wrong way to handle a funeral or to grieve. At the end of the day, whether its going for a meal or a walk at her favourite place, or even sitting quietly at home you will find the best and most natural way, and whatever that is will be the right way for your FIL, your DH and for you.
Thinking of you at this time.