I don't think it's fair. Not because of the whole blood thing, or the fact your DC get stuff at their dads that their half and step siblings don't get, but purely because giving two child in a family something on Christmas morning and not the other two, be it a token, isn't kind or fair.
I get kids have to know the world doesn't revolve around them, but deliberately excluding people, any age especially kids, is crap and speaks volumes about that person.
Making them watch their sibling open a present from someone who knows you well, stays with you regularly, and Isnt a stranger creates the feelings of favouritism and resentment. If it were a total stranger who the kids had never met, and who their sibling knows better, such as a god parent, then I think it is a bit different.
But they way I see it, your DC are Mils grandchildrens siblings and treating them.differently like this doesn't promote equality in the family, nor good relationships between siblings.
Because kids are immature and don't see things the same way adults do, and being fair is very important to children's development, especially in a family.
I feel your pain OP as I had this with my mum and dsd at the start, and why she didn't see she had to mark any birthday or Christmases because dsd got stuff from her mums side that ds didn't. That DS was her grandchild. I pointed out dsd was a child, who didn't want two separate families and would probably prefer two parents together but that wasn't an option. I pointed out that DSD is DHs daughter and his family, and Ds big sister. If she considers DH and DS family then she needs to consider DSD family, because she is to DH and DS. Also, and this was my main point, because it's shit to leave any child of a family out. She got the message and actually appologised. Your either a family or your not.
My sister was the polar opposite from the start though and always treated dsd like a niece. DSD is now very secure when we spend time with them when she's up, and my sister is one of her favourite aunties.
With people outside the family though I never ask, but if someone does buy for her I am very grateful. There are two kids in this family, and they are treated the same. and while DSD gets extra at her mums that's irrelevant to when she's here, as were not her mums. I
But this is Mumsnet where nothing in regards to step families are logical or make sense.
But I'm with you, treating children differently irrespective of the side you are on is a shit thing to do. Guess all you can do is work on your other children to make sure they realise it's not them, but your in laws. Maybe take a step back and not have them.over as much, and let DH take your younger children round.