Poor bloody OP - now to add to the stress of having a severely allergic child, people are suggesting this is a wind up.
I recognise the emotions here - my daughter has life threatening allergies (milk, eggs, sesame, wheat and some nuts) and my ILs have ranged from openly sceptical, to negligent, to now partially coming on board (but still being unsafe IMO - "would these cheesy bites be ok for her" being the latest, but at least they are now asking). When you are dealing with this level of stress to have people - who should have your child's best interests at heart - being so blatantly unhelpful can be the last straw. I have sobbed privately on many occasions at the eye rolling and sarcasm.
With our range of allergens it is very difficult to exclude them all from everyone's diet. However, we go on holiday each year with friends and their children who have volunteered very graciously to do exactly that. We all cook and eat safe foods in and barring the odd treat out, and the odd bar of illicit chocolate once the children are in bed, everything is fine for dd . I have tried to tell them how wonderful they are being each year, they just reply that they want me to enjoy the holiday and to relax and that doing it any other way is inconceivable - it comes across as no big sacrifice for them.
DD (5) is increasingly able to manage her own allergies and obviously encounters situations all the time where she must be careful. But for that week she gets to eat the same things and her mother does not have to leap about wiping toddler's mouths and moving plates.
If I have any advice to the OP it would be to avoid this situation again. They are truly unpleasant and it must make your dh very ashamed.
To those that suggest she is BU, it is a well known response that when fear steps in people sound more hysterical and paranoid. The OP and her dh do not trust the ILs and wants to convey just how serious things are. They then get into debate about locking cereal in the car which makes them sound over-protective. I recognise this vicious circle - the opposite is also true. When people are considerate and listen to your concerns it is much easier to moderate your response - you feel calmer, sound sensible, they decide you have a reasonable approach and everyone is happy.
OP - please do not be too depressed by this. Your instincts are right and your child needs to be protected first and foremost. 4 is still very young and the ILs are clearly in denial. Just be calm with them, step away and enjoy your holidays from now on without them.