when do you know it's time to cut out certain family members?

I'll try to make it short. Husband and I are young and married 2 years. We have a 9 month old. My family is great and his dad's side of the family is great. His mom and her family (divorced from his dad and remarried) are really toxic and mean and manipulative. I try hard to get along with her and generally we do get along. But then she'll just snap about my parenting (like no pictures of my son on social media) and name call me and bring up a favor she has done for us before to try and manipulate my rules. She has always been emotionally abusive to my husband but he puts up with it, but I don't think I can allow the cycle to continue with me and my son. She will whisper creepy things in my son's ear like "grandma loves you more than anyone else." I try talking to her about the way she treats us and she will cry and agree and then continue treating us poorly again the next time she feels emotional. This woman and her husband are truly manipulative and harsh and only give love when they know they can use it against us in the future. Also another big reason is that my MIL seems to have this weird sexual fetish about my son being naked and wanting to be alone with him. I don't care if my husband sees them, but he doesn't seem to want to either and I could deal with it, but I don't want my son exposed. Have you ever cut family out? When do you know it's time?