It worked for us. My mother jn law was desperate to go part time at work because of her health but couldn't because she couldn't afford to. We moved in which allowed her to do so as we paid 2/3 of all costs involved which cut her down from 100% to 33%. We did our own washing, cooking, cleaning etc, had our own fridge/cupboards.
What made it work so well for so long was we were able to split the house (at her suggestion). We had the upstairs (so turned it from 3 bedrooms and a bathroom upstairs to a bedroom, a nursery, living room and bathroom) and she had the downstairs (having a bedroom which used to be a study/junk room, living room and downstairs shower room/toilet). The only real shared space was the kitchen and dining room which worked well, often one person would end up cooking for everyone and we'd all eat together.
There were no childcare expectations (and I don't think MiL ever did any childcare other than maybe 10 minutes keeping an ear out for a sleeping baby whilst I popped to the shop).
It worked for the dogs as with our alternating days and shift patterns at work, they were never left on their own for any great periods of time.
Sadly, about 2 years after we moved in mother in laws health took a dramatic turn and we were able to care for her at home until she died a few months later.
It worked well for us but we already had a very good relationship where nothing was left to fester, any issues from either side were brought up and dealt with immediately.