It's not something I would have done as I said I never did shared bathes or showers with friends/cousins/siblings.
Your son is of school age now so that for me would be definitely an upper limit of comfort.
Obviously you dont have a problem or it wouldnt be happening in your house.
Your sd mothers does though.
Its uncomfortable because it makes it seem like she is implying that there is something wrong or your children are a risk to hers.
No mother wants to think that and I understand that.
The reality is though that statistically your children are a higher risk to her than if they were full siblings and the difference in sex is an even higher risk.
No we cant remove all risk of bad things happening we would wrap them up in bubble wrap and never leave the house if we were to try but we can reduce it.
Your post mentions she is aggressive and that your and your partner are on the same page on your parenting approach and it gives the impression to me you think your style of parenting is better.
If she was a more of what you considered a reasonable person would you take her concerns onboard and make some changes?
If the very worst case happened and you found out one of your boys had sexually abused your sd or the way round, would you still be happy that you introduced such relaxed boundaries in your home regarding nudity and personal privacy? All because you consider yourself a family?
It's not a risk I personally would be willing to take with any of my children biological or step.
Allowing the children to see each other naked regularly has already removed a very significant boundary.
You asked for opinions but I'm not sure if you actually wanted them or you just wanted to be told you and your partner should ignore her 'your house, your rules'.
On some things I think that is true, things like what you cook for dinner or dress them in or take them out.
Sometimes though 'your house, your rules' isnt a good enough response and there should be some type of joined thinking. For me personally this is one of those issues.