He should stay with his family at the family party. Looking after two excited kids at a party is knackering and much easier in a tag team.
But it's not his family, it's his in laws and all his partner's family.
And if the kids are too much effort, how about enlisting some of the other family at the party to help out, since they'll all be there in the house and together. I am assuming the OP's kids won't be the only kids there so why not just share the work with all the other parents.
If my mum had a birthday weekend and rented a house like the OPs family, we'd probably stick all the kids in one or two rooms together (to make it a bit more fun for the little ones to have a "cousin sleepover" and to keep the teenagers out of the way of everyone else) and so in the evening the kids would either be in bed or hanging out with the rest of the family. Eg on Saturday night after the meal we'd go home put the babies to bed, set the little kids up watching a Disney movie in the lounge, the teens would be doing their own thing and all the adults would be sat outside on the terrace/in the kitchen/other sitting room chatting and having a few drinks. We might have paid/bribed one of the teenagers to keep an eye on the younger ones or else we'd have told them to come get us if there was a problem and every so often one of the adults would look in on them but otherwise they'd require very little active "parenting".
He should stick to the original plan and not let you and your family down. You don't kick a previous plan out just because you get a better offer.
How is he kicking the previous plan out or letting the OP's family down though? He is still planning to attend the Saturday afternoon meal and the Sunday picnic ... he'd just like to attend an outside event for a couple of hours between the two "events" on the Saturday night.
I love my family but I am also an introvert and need some quiet time to myself to recharge between social engagements, even when they're with my family. If I was attending this weekend, I'd still be taking a couple of hours away from the group in the evening to have some down time out of the "festivities" (even if it was just heading to my room to have a shower and spend half an hour reading my book) so how is that any different to going out to another event for a couple of hours?