Ye gods..
This is a seriously fucked up family.
You need to play your cards extremely well here. You need to create a file of evidence to show that H's family must not have access to your child under any circumstances, at any age.
Ask H to tell you the specifics of the crime BIL was found guilty of. If he refuses or says he doesn't know, or lies, take note.
Do a Sarah's Law search to verify.
Consider informing police that the family of this predator have shown themselves willing to circle the wagons around him.
Definitely tell the other SIL.
It is time to blow this thing wide open.
Request in writing (text or email) the return of all physical photos (and all copies) of your child in the possession of all H's family members.
Request in writing that all photos of your child on all their electronic devices be permanently deleted.
Give a deadline of one week for return of the physical photos and 24 hours for removal of photos from devices including remote storage, cloud, etc.
The response to this will be very telling. Take notes and save the notes. Note your H's response to your action.
Tell H that therapy in good faith on his part is a condition for you to stay together. Tell him the two of you are going to do couples therapy.
Decide guardianship of your child and both of you need to take out life insurance. The guardian should be one of your family. The beneficiary of the life insurance should be that person. The person should be warned about H's family.
Tell H he needs to:
1 Fully accept and acknowledge that BIL is a danger to children.
2 Commit wholeheartedly and with enthusiasm to putting his child's safety above all other considerations including the feelings of his family members and ongoing relationships with his family members.
...or he will find himself divorced and he will only have supervised access to his child at a contact centre.
You are essentially requiring your H to nail his colours to the mast. You are entirely reasonable to do this. If he baulks, remind him what he stands to lose.