DH is still a smoker (I quit when I fell pregnant with my twins) they are 19mo now.
He still follows the NICU advice which is (as you probably know) never smoke indoors/near the children, wash hands thoroughly afterwards, change top once back in (or have a specific jacket to use whilst outside smoking), wait at least 30 minutes before picking up or breathing near the children. Now he rarely smokes during the daytime and will pop outside for one or two once they have gone to sleep for the night. It’s not ideal, but he’s made his best efforts so far to reduce his impact on them because of his choice (he is aiming to quit but hasn’t quite gotten there yet, he’s not good at cold-turkey as he has tried this approach before and just ended up back on the ciggies after a week or two).
His Dad is a heavy smoker and even my DH can smell the tobacco/smoke smell from his clothes when he comes for a visit, at times it can be eye watering! Problem is, we can’t tell him not to smoke, but we do want him involved in our DC’s lives as he’s a lovely man and doting Grandfather, he adores them.
So we had to make a choice, allow him to interact with them as normal despite the 3rd hand smoke issue from his clothes and trust him to not smoke near them or indoors when looking after them for us, either at our house or his. OR severely limit his contact with his Grandchildren because he is a smoker (as I’m an ex smoker and DH still does we’d be a bit hypocritical to do this).
It is true that there are more health implications of walking with your DC down a high traffic high street (fumes being the main concern from cars/vans etc. than limited contact with 3rd hand smoke) - I was advised of this when my DD was on oxygen for the first few months when she got home and I was extremely totalitarian about nobody approaching her if they had recently smoked whether they had followed the above advice or not. My HV worried I was becoming obsessive (rightly so) and said I couldn’t keep DD in a bubble forever (or DS for that matter) and told me to make my best judgment for their wellbeing at the time as they will continue to interact with family as they grow older and when would my attempt to control exposure end? When they hit 3yrs, 5? 10? Etc and made it clear that I was setting myself up for a near impossible task if I continued on that road.
If you can trust your MIL to not smoke in the house whilst your DC is there, to make sure she washes her hands afterwards etc. then that is all you can ask of her realistically.
As for the house being “contaminated” this is true, there will be residue on any fabric surfaces, my FIL always opens all windows/doors for as long as he can a day or two before my DC are due to visit him, then will have any further cigarettes outside to get into practise for when they are there. But honestly OP only you can decide for your DD.
Also if your DD is older than 12 months, generally well with no breathing disorders/difficulties she should be okay with limited exposure. If your MIL already interacts with her straight after having an outside ciggy when at yours, she can manage a bit of time at your MIL’s house just fine IMO (I did extensive research on this with the aid of my DD’s GP and HV due to her previous oxygen requirements and the increased likelihood that she will suffer from Asthma during her childhood). But I will stress again - do what you feel is right for your DD and if you’re not comfortable with it, don’t let anybody strongarm you into doing it.