I live with my mil and I don't trust her to be responsible with my children. She has some slight mental and physical issues that makes her, in my opinion, unsafe. She's tried to offer my dd cat poop as food (found it on the floor and thought it was a cookie), spoiled milk she found in the fridge (I only offer dd soymilk but my sis drinks cow's and never finishes it and never clears it out promptly), and just yesterday, burning hot chicken nuggets!

: I have specifically told her she is not to offer any food or drink to my daughter under any circumstances but she doesn't respect my wishes (obviously) since I was standing right next to her yesterday when she was trying to give dd the chicken and I'm telling her No it's too hot and she's still going through the motions.
My solution to this and the fact that I don't think she's gentle enough when handling dd, is that I don't ever EVER leave dd alone with MIL. If she goes downstairs, I don't care if ds just fell asleep in my arms and I'm all settled in on the couch after only 2 hours of sleep the night before, I get up and follow her and supervise all interaction. I'm sure my MIL feels that I am silently hostile towards her but really I could care less. I don't trust her and she continually reinforces that lack of trust by doing things I consider unsafe or flat-out ignoring me when I give her a direct request like "don't give that chicken to dd it's too hot". Luckily my dd, even at 2, is very smart and handed the hot chicken to me before even trying it. And she was smarter than MIL and was not interested in eating poop or sour milk, for those who were wondering.
OP, I am glad you are dealing with your ILs to everyone's satisfaction. If they continue to disappoint you in their choices of action, my only solution is to supervise all interaction or set your house up in such a way that you limit your kids' access to common areas so that you know the kids won't be wandering into their presence without your supervision. That's what I have to do. It really sucks that I live with extended family but I have to act as though I am singly responsible for my kids 100% of the time when dh isn't around, but that is my life right now and it's tiring but better than worrying MIL is going to hurt my kids.