Sorry, that would be the end of the relationship for me.
Especially if your DH has your back.
Your DS is tiny. How many years do you think he has before he starts overhearing his granny and aunty calling his mum a stupid bitch when he's with them? Even if that doesn't happen, he'll know - he'll feel the atmosphere, see the raised eyebrows, absorb the barbed comments - 'Oh well Mummy isn't able to do this or that DS, you know she has her little problems...'
I was that child, absorbing bitchy comments and feeling uncomfortable in adult 'atmospheres'.
I would never wish that kind of family dynamic on a child. Yes, it's very damaging.
If your DH is on side, lucky you. Tell him you want better for your DS. You want him to feel secure in a happy family. That does not include being allowed to develop a close relationship with someone who hates and denigrates his own mother.
And remind your DH, this is the level of respect your own mother and sister have for you, your family, your choices.
That's not love.
I don't know hoew I'd handle it right now on holiday but I certainly wouldn't be able to speak normally to her, so I'd have to speak to DH and let him handle it.
But the relationship would be over.