Your in-laws have no morals.
If my son/brother came along with a woman who had had an affair with his married brother (while his child was a small baby to boot) and subsequently harassed his brother's wife ... I'd say
"mate, come on .. what the actual fuck are you doing? She's a woman who cheats with married men, not only that but she's cheated with your married brother. And she showed herself to be a nasty, stalker type afterward as well. Not only dud she chest with a married man but she cheated on her partner, his friend, too. She's clearly gutter trash, probably unstable and it doesn't matter if it was fourteen years ago. Time doesn't matter with things like that. There's plenty of women out there, why the fuck are you involved with one your brother has shagged, and who chested on his wife with at that?! Do you think it's fair on his wife?
Do you think she's maybe still looking to get at your brother and his wife? You could be being used on too if everything else. Any other woman would want to stay far away from him and his family but instead she's in there, shagging his brother and going to his family gatherings".
My take would be that if he wanted to date her, go right ahead, but she wouldn't be in my house. She wouldn't be at our family gatherings. The most I'd concede would be, if they're still together in a year or two, I might consider her attending.
The fact your in-laws haven't taken this stance suggests they have v low morals and boundaries.
Which perhaps partly explains why you h had such low morals and boundaries when he cheated on his depressed, new mum wife.