Mother-in-law thinks our son is HER son… am I overreacting?

I’ve been with my husband since 2020 and took on a stepmom role with his son (he’s now 7) raising him as my own since the end of 2020, and we have a 1 yo daughter now as well. We have a great relationship and he has seen me as a mother figure for so long. By circumstances I’ve taken up the mom role in his life, he’s an absolute blessing. His mother is still in his life, but she isn’t exactly the greatest at making an effort or being there, but I’ve never tried to replace her and even though there are things we don’t like or may not like her at times, both me and my husband have nothing but respect for her because she’s our sons mother at the end of the day and he loves her. Prior to our relationship, my husband was a single dad and my mother-in-law helped with his son watching him on Saturdays. She was his only grandparent, so they are very close. Since we’ve been together, he’s grown a great relationship with my parents and they are also his grandparents now too. I spend a lot of time with my family, because we are super close and i visit then a few times a week during the day with the kids. They have a free schedule most days where my MIL doesn’t. She doesn’t make much of an effort to spend time with my daughter, but gets upset that she’s uncomfortable with her or we don’t ask her to watch her. She thinks I drop her off with my parents often (which I don’t, except for a couple hours here and then for a nail appt or a rare date night), and is jealous at how comfortable my daughter is with my mother. She’s always talked about how she can’t wait till she can “snatch” her and take her for the night, and almost always only asks to keep our son for the weekend. Hardly ever wanting to spend time with the kids without “taking them” or all together as a family. She doesn’t invite us over. After our son asked to spend the weekend with my parents, which he had an amazing and fun time, my MIL found this out and had a whole jealous fit. Said if she can’t spend time with our daughter that was “fine, but don’t you dare take my grandson away from me”. She has overstepped so many boundaries, I could tell her not to do something a certain way with my daughter and she will continue right in front of me, she will override our parenting with our son to where he’s unsure who to listen to, and she has the insane thought that our son is… HER son. Just this week when our son came home from her house, he looked so out of it and upset but wouldn’t talk. (He usually gets this way when he misses his mom and doesn’t voice it) but because he was with her we thought we’d ask… she tried to tell us he was “just relaxed” as if we don’t know our son, and when I said “okay just wanted to ask, maybe he’s missing his mom” she responded with “yes but grandma is like mom!” That was it for me and I lost my mind. I know that’s a lot to read, and I’ve only vented about it to the few people that know the situation but please tell me if I’m overreacting or if I have a right to feel uncomfortable with her thinking our son is her son and the need to always want to take our kids or just the crossing boundaries overall?😫 Had a great relationship with her before, but I honestly have taken such a step back since more events that would take even longer to speak about.