I am so sorry for your loss, it must be devastating to lose a sibling and my heart aches for the children who lost a parent.
You ILs reaction is very strange and unkind. A stranger on the street would have more sympathy I expect!
But regarding Christmas - perhaps despite their religious/spiritual background they simply didn’t know what to do. My mum always said the LAST person she wanted near her after my dad’s death was her vicar, he kept going on about peace and heaven and spiritual comfort and the life everlasting. I guess other people like that message but my mum wanted to slap him. But then the church warden came to pray with my mum, and was just quiet and gave her space. And that worked for her.
Three days following your bereavement is barely time to catch a breath - I have no idea how you managed to travel to in-laws family home with your kids in tow - what a thing OP. It was a very brave and possibly silly thing to do! You must have been in bits,
Perhaps it would have been better to cancel Christmas - but then, the kids would have not understood.
Perhaps the ILs thought you would fall apart if they acknowledged your grief and best thing was to just pretend it wasn’t happening.
Perhaps they thought, for the sake of the kids, you didn’t want to collapse from the trauma until after Christmas and by turning up you were indicating you wanted to go down the “stiff upper lip” route.
They should have asked, they should have offered sympathy and taken the kids off you and let you find a quiet room to wail in, or sleep, or speak to your other relatives. They should have known it was too soon to try and tough out a family celebration.
But Im not judging you or them, because we all make strange decisions faced with overwhelming grief - whether our own or someone else’s.
What about your brother’s family, where were they at Christmas? Did they encourage you to continue with your Christmas plans? What about your dh - did he recognise you probably needed something different/more after your brother died in your arms?
Having anyone die in your arms is horrific. When it’s a close relative it is something uniquely awful.
I would suggest you need someone to help you work through these feelings, outside your family - a counsellor or a good friend.