Me and fiance have a 7 year old together.
Fiance's father was emotionally abusive towards him when he was growing up, but his dad apologised and we let him have a relationship with DS.
DS goes to MIL and FIL often, yesterday he went there, and when fiancè picked him up. He was quiet. He eventually told us that FIL told him he can't have his nails coloured in with pen as it's for ‘girls’. Fiancè confronted him and he said that DS will turn out to be gay if we let him 
MIL then stuck up for FIL and told fiancè to stop overreacting!
Fiancè has said he doesn't want FIL anywhere near DS, which won't be possible as he'll be there whenever he sees MIL, and fiancè doesn't mind MIL seeing him/ taking him places.
What do we do?