I agree with you and disagree with those saying you should just be grateful. Your MIL is doing this for herself, not for you and your DH. If she’d just wanted to help you she could have said "Let me know which car seat you’d like and I’d love to buy it for you", particularly as you’d already told her you wanted to look at them in the shop. "Most expensive" doesn’t necessarily mean it’s the one you would have chosen or the one most recommended by e.g. Which (and of course the shop assistant would tell her the most expensive one was the best!)
I wouldn't dream of buying big stuff like this for my grandchildren without consulting their parents - and their mother is my daughter (with whom I have a great relationship), not my DIL.
This is your baby, not hers. She presumably chose what she wanted for her own children and now it’s your turn.
I think it’s great that your DH is sticking up for you and telling his DM to wind her neck in. I don’t think you or he have anything to apologise for. Having said that, I suppose it might be an idea to check what model of car seat it is, just in case you would have ended up buying that model anyway, which woukd be awkward.
It’s worth taking a stand now or you'll have lots of problems in the future, e,g. she'll be buying the baby's highchair or playmat or coat or shoes rather than letting you choose them. IMO it would be fine for your DH to contact her once more and say "Come on Mum, let’s not fall out over this. It was very generous of you to buy the car seat but we would like the pleasure of choosing exactly what we want for our baby. I expect you felt the same about me when I was a baby." Then leave it up to her. I doubt if she'll hold out for long.
Is there a FIL? If so, and if he might be more reasonable, perhaps your DH could talk to him.