Sounds a tough situation MrsW. I personally would be of the opinion that the baby's health and wellbeing comes first. So if that means pissing SIL off, so be it. That baby relies on others to care for her and not making up feeds correctly or safely has the potential to be very dangerous.
If you think the way she is behaving is out of character then it sounds like it could well be PND - although it is unusual ( but not unheard of) for the baby to be neglected (whether that be in the loosest or most serious sense).
Maybe approach her and talk about you being worried about HER, don't mention her dd and your concern for her care. Make it all about HER. Maybe this approach will be more useful?
I have got a cold. Grrrrr.
Off to the soft play place this morning, then M is off to his Granny's for the arvo.