I think it depends on whether your DP doesn't want his Step Mother (not going to call her the OW after 20 years!) there because he really dislikes her or because he doesn't want to upset his mother.
I'd never expect two sides so opposed to each other to spend a day in close quarters. It just wouldn't go well.
If it was me and DP agreed, I would have MIL on Saturday and Fil +SMIL on the Sunday.
I think this would avoid a massive day long nervous cringe fest for all involved. The event would not be about your DC but about a 20 year old quarrel between DP's parents and it would probably be enough for you to go NC with all of them.
MIL can't insist that you go NC with your DC's other grandparents. Its not up to her. Its up to you and your DP and as I've said, it really depends on DP's feelings towards FIL and SMIL. It sounds as though he's still fed up with FIL and his unreliability but perhaps this is a chance of an olive branch.
You said that DP's DM objected to you visiting FIL and SMIL after visiting her at Xmas but I think this is unreasonable. Its understandable that she doesn't want to be in a small family group with them and so I think its fair to accommodate that but if you do, the trade in is that she can't have a tantrum because you are still treating them as grandparents, which they are. Whether they choose to get further involved or not is up to them.
I think MIL needs to become accustomed to the fact that FIL and SMIL have been together for 20 years and needs to not inflict 20 year old grudges on her son and grandchildren, although I understand this may be a big ask if it was very acrimonious at the time. But her problems are between her and FIL, not your DC. She ought to be able to accept that you meet up with the "other side"
In a way it might be better not to have a formal party for your 1 year old like this and just get each side used to seeing your DC on an informal basis in neutral territory and see how much interest the FIL actually takes in them. But I'd keep them seperate for the moment where possible. If for example it was a large event with 80 people, that's a different matter.