My mother-in-law taught my daughter to "love bite" and now we're dealing with that awesome "gift"

My mother-in-law is just a shit disturber. She is never allowed around my daughter unsupervised but on Thursday, she visited and only once, she bit my daughter and my daughter (2.5 years old) bit her back. They giggled and she reinforced the love bite thing. I said no, we don't bite anyone in this house. We're going low contact for a while.

Friday my daughter bit two kids at daycare and called it love bites. She left marks on them. We've reiterated that we don't bite anyone for any reason. We don't touch anyone without their consent. The daycare said that if a third incident happens, she will be sent home for a couple days and the fourth time, we'll need to consider alternate accommodations.

She's bitten my husband and I several times now since then and I'm so afraid that next week she'll be kicked out of daycare. Luckily we don't pay for October until the last Friday in September but still.

Please send tips on how to get this to stop fast. I can't afford not to have this kid in daycare and the waitlists are horrendously long.

We tell her no biting and if she does it when we're doing something like storytime, we tell her that if she bites us again, story time ends. We stop what we're doing and go do something else.