It sounds like you just don't really like her, and that is strongly flavoring your response.
Is it a good baby gift? No. But how many years has it been since the woman had a baby? And honestly, all three of my toddlers would have LOVED something like that.
And yes, she's probably eager to buy something "for a boy", especially if he is the first grandson. But that doesn't mean that she hates girls. Sometimes people get tired of buying the same stuff, and especially if they are older or locked into certain gender ideas, they may think getting a chainsaw would be upsetting to girl parents.
Everyone in our family went a little nuts over my twin boys because they were the first boy grandchildren. But both of their girl grandchildren are major tomboys (or were, at that point). When my inlaws noticed that Fi was playing as much with the tools (if not more) than the boys they got her her own toolbox in her favorite color (pink) with a variety of stickers of tools and fairies (her favorites) to decorate it with, and some letter stickers so we could put her name on it.
I would be really careful about assuming the worst here. Of course, it's my MOM who always sends the weirdest crap to my kids. I learned long ago to just open up her packages at the outside trash can, because I was going to end up dumping 5/6ths of it in there. But I understand that has the eldest of many children, who lived in a lot of poverty growing up, who lost everything as a child twice in house fires and moves, *stuff* is extremely important to her. It's just how she expresses love. It doesn't mean that I have to let it invade my house (since frankly, her obsession with stuff was not so nice for me growing up and I have my own pain related to it) but I have learned to just shrug it off.
If you get all pissy about it, who's it hurting? Not her. You. It contributes negatively energy to your house. Surely this is not the first weird gift that she's given anyone. Some people are just that way. The best way to deal with it IMO is to laugh, save it for a white elephant gift party, or pass it on to someone else or trash it.
And who is gender stereotyping by seeing a chainsaw as "all boy"? If you've got daughters, do they like tools? Would it make a fun outdoor toy for them? If they don't or it wouldn't, then just donate it or dump it. This won't be the last time you'll have to deal with this, so think of it as a practice session for the even weirder gifts that are likely to come.