I may have got hold of the wrong end of the stick here, but the problem seems to be not that Grammy6's SiL refers to her as Granny when speaking about her to his DCs, but that he never talks to her at all.
So that instead of saying 'Can I get you a G&T, mother-in-law?' he says to one of his Cs, 'Ask Granny if I can get her a G&T.'
If so, yes I think that's weird.
I would deal with it by saying, the next time it happens,
'Oi! I do have a name, son-in-law. It's ** and you can use it to address me directly!'
Nothing like spelling things out to people who have forgotten their manners, or never learned them in the first place! 