A perspective from a man who got out of an abusive marriage a couple of years ago, that I hope might help.
First, it is not just right that your son take steps to protect himself and his children - it's essential. The damage that witnessing domestic abuse has on children can be profound and long lasting. And when some of that abuse is directed at the children, there is no alternative but to do something. The steps that your son has taken are the right ones, and - while very difficult for everyone - put him and his kids on the road to a far happier place. It is hard to break free from a relationship like that - particularly for men. So, his doing so is a significant step forward.
The fact that you're worried about the effects this will have on your daughter in law is a testament to your compassion. I'm sure that your son will be thinking similar things. Part of the dynamic of an abusive relationship is the tendency to protect the abuser from the consequences of their actions - in my case, whether it was refusing to support an arrest and prosecution o my ex wife when the Police were invovled when she assaulted me; hiding what she was doing for so many years; or even now not telling many friends what really happened to protect her reputation. Your son has been conditioned to protect her from the consequences of what she has done to him, and to the children.
But that doesn't actually help anyone. My ex was convinced that the absence of consequences meant that she had never actually done anything wrong. She didn't even believe she had assaulted me, because if she had then she'd have been prosecuted. So I must have imagined it! The Police and hospital records indicated otherwise, of course.... (Yes, she has mental health issues).
So, I understand your concern about the impacts on her. However, the alternative would be to do nothing. To continue protecting her from the consequences of her own actions ahead of protecting your son and his children. That could never be right. He has taken the right steps, and now the cogs will turn on the involvement of the authorities. That could result in her being prosecuted. It could result in her being deported. But those are not your decisions - that's for due process of law to determine what the right steps to take are, to protect your son, his children, and in the interests of UK public safety. If she loses access to her children, that is sad for her. But she brought it on herself.
The people to focus on here are, I would suggest, your son and his kids. No matter what shesl's done, she's their mum and they will doubtless miss her terribly. I would suggest focussing your efforts on engaging with the support that is available for them through schools, the GP, and domestic abuse charities. With love and support from your son and his family, the kids can thrive through this. But it will take a lot of work. Save your sympathy and care for them. They deserve it. The abuser does not.