How would you deal with this??

So my husband was watching my nephew yesterday for an hour while my MIL took her dog to be put down. While my husband was there our nephew said something that really was uncalled for, while talking to him and my other BIL (not nephews dad). So my nephew said that he was really upset that “grandma couldn’t go back to school shopping with him because the princess needed new shoes”. He was talking about my youngest daughter who is a yr old. My MIL and I had gone to the outlet mall to buy her shoes,( she has really chunky feet and needs special shoes) and clothes for baby boy due in October, and we ran into my SIL, nephew and they were with her mom. ( our husbands are brothers). Only then did he ask for her to go shopping with them. But the only way he would’ve made a comment like that is hearing from someone else, my SIL. I knew my SIL has had some ill feelings towards me and has always treated my youngest daughter differently than my older daughter, but I never realized just how deep her dislike for her was. When I showed up to the house later that day with the girls, he was always telling my youngest to stop messing with stuff, stuff she’s allowed to play with at grandmas, or he would tell her to go away or ignore her if she wanted to play with him, but he irritates my oldest by trying to drag her around to play when she doesn’t want to! Because of my SIL attitude and comments towards her(it’s always behind my back, but he repeats everything she says) he now treats her horribly! I dont know what to do! It makes me sick to my stomach! I don’t want to be around her because she is so fake to my face and pretends to want to hold my youngest and love on her, but I just don’t want her near her anymore. Sorry for the rant! 😔