No right or wrong, just what seems best for the child at this moment. Your DiL will know the details and knock-on effects.
One family we are close to have 1 parent working full-time but predictable hours and 1 part-time whose work can be done at any time of the day or night. They can manage childcare between them and still have at least one 'family day' at the weekend.
Another has 1 full time at home, and a part-time key worker who has arranged to do night shifts.
Both of these families can work, and give good quality attention to a toddler.
Yet another has 2 parents in very demanding jobs - 1 in public service, the other a company that demands its pound of flesh. When they were trying to look after a toddler, I felt he suffered - they did the best they could, which meant either working or caring from 5.30am to 11pm 6 days a week. no-one came out of that well.
I would say that you think she (and, I presume, your son) are best placed to make the decision and you back them.