Mother to a toddler here. These are very common guidelines during covid and I think this is a very polite note attempting to manage expectations in advance. Your niece has done an excellent job of communicating their boundaries and safety precautions clearly.
My child was born a few weeks before covid, so we were able to welcome visitors to the hospital. But we did establish a clear boundary that we wouldn’t be welcoming any visitors to our home whatsoever until our son was a week old. My MIL wasn’t happy about it, but I knew that we needed this quiet time to settle in at home, work on breastfeeding and bond with our son in peace. Watching everyone play pass the football with our son at the hospital when I was exhausted, hormonal, trying to recovery, and struggling with breastfeeding was hard enough. We requested grandparents, aunts and uncles to get a flu shot and be up to their date on tdap shots (we were so grateful no one gave us a hard time about vaccines). We also requested no kisses on face or hands because it was rsv season, which was very widespread at the time and is extremely dangerous to newborns. We allowed kisses on the top of the head or body. Again, my MIL wasn’t happy about no kissing, but she mostly complied. If we had known about covid then, I absolutely would’ve required covid vaccines and a negative test to hold our newborn.
You may think this is excessive, but you can’t possibly imagine what it’s like to have a newborn during the pandemic. Our responsibilities as parents are to our children. While I feel guilt and sadness when I disappoint family members, my child’s safety will always come before other family members’ feelings.
Your niece’s child will be born in the dead of winter. At the height of flu, rsv and - now - covid season. Being a family member (even grandma) doesn’t give one a magical power to not transmit illness, nor does it entitle one to make demands and apply guilt on the new parents here. Please recognize that disappointment is understandable and valid, but there is serious narcissism in holding your wants and expectations in higher regard than this new mom’s and her child’s needs.