I've got a dog who generally just avoids / ignores strangers - and has quite a few issues with anxiety in general. After a house move he went full guard dog and stopped letting strangers in the house - we had to get a behaviourist in in the end (he now just thinks visitors including the Asda delivery man are here to play fetch with him and will mug them for a game - a substantial improvement even if it's somewhat impolite!)
I would suggest not forcing your DDog into interactions with strangers - you don't want him to start escalating behaviour to make sure people don't get too close - the last thing you want is a bitey dog. Mine wears a lead slip that says "ask before stroking", and I've found it surprisingly effective - I think the ones with a direct instruction, not just "nervous" are most effective. Mine has the undertone that suggests he might bite - he won't, but I'm happy for people to believe that as it means they keep their hands to themselves! I got mine from here www.saintroch.co.uk/ My DDog would be a really crap therapy dog, but it stops 99% of people just reaching out to grab him because he's little and cute. He ignores strangers and is happiest if they ignore him too - and we live in a city centre so there's no avoiding people!
Likewise, I wouldn't have random strangers routinely feeding treats - you'll put the dog into a state of internal conflict, where the dog has to go near a scary thing to get the food it wants. Much better to work with the behaviourist to teach DDog that humans aren't scary food dispensers!
Could you meet up with your in laws and the dog in advance - perhaps for a nice walk in the woods or somewhere low stress for DDog so he can meet them? Christmas is a high stress day for dogs anyway - no routine, lots of food, lots of human emotions to pick up on, visitors (and WTF is a tree doing in the house?!) etc. I'd make a plan to ensure you have somewhere DDog can choose to go, or be put if the need arises, preferably with a stuffed kong to entertain if he does end up being put there!
We've got a relative who doesn't like dogs we don't like her either and who declared DDog "vicious" after he ran at her growling and the rest of the family sniggered. You have my sympathies!