I agree with bundle. Given Steve's understanding of the situation, and that you are his primary carer, I think you're in a stronger position than you realise.
I think that the medical staff can see right through your MIL - they will have seen it hundreds of times before. If they let Steve go and live with his mother, given her understanding of his situation, they will be failing in their duty of care, surely? I don't think their responsibilities end when Steve comes out of hospital.
Also, does everyone at the meeting have an equal vote? I don't think that is the case.
And I would impress upon the medical staff that Steve and his dumbass family are not to be relied upon to pass on messages.