"My view is..."
"SILs parents are telling him..."
Thing is, it doesn't really matter what anyone's opinion is. It's up to the court and the laws.
I'm not sure why either you or sil's parents are telling them anything. Are they very young? No matter, if they're adults, then they need to figure this out themselves or with the help of the court.
I know you feel you have a vested interest here because you and dh gave them the deposit. But I agree with those pps who say the key words here are "gave" and "them." It's the same as if you gave them money to place in a joint account. If they split up, half of the money would be his.
Also, I know you would like dd to have the deposit money. Of course you do. Just as his parents want him to get half of it. You each want what's best for your own child. Imo, it's not about what's "moral' or not, it's emotional. Which is why we need laws to decide these things and solicitors to help us with legal matters, not parents.
I think you're confusing dd with yourself. You and dh gave the money, not dd. Even if it was a loan, it would be owed to you and dh, not dd. Surely, if it was repaid to you, you would probably then give it to her. But it isn't "hers" just because her parents gave it. She is a separate person from you. I think both you and sil's parents are losing sight of the fact that your "children" are independent adults.
Still, it hurts to see half that money go to sil, now that he and dd are separating. I get it. But once you gave that money, it was no longer yours and you have no say over what happens to it.
How does dd feel about this? Does she want the full deposit? If so, then she (not you) needs to see a solicitor about it. If not, then, that's that.
Please be careful about getting too involved in this. If they reconcile, any interference could come back to bite you.