MIL is trying to ruin our social life after an argument

So I thought I had a pretty good relationship with my MIL. We’ve had a rough patch when me and my DH lived with her while we were looking for a house. At one point she called me a “robot who does anything her husband commands” because I wouldn’t side with her in an argument. Whatever, we moved out, water under the bridge.

She was a good grandmother to our daughter. She’d usually come to our house once a week for a couple of hours and be a fun engaging grandma. She did seem more interested in the idea of being a grandma and the social status that came with that, but it didn’t bother me all that much since she was the one grandparent who consistently showed up. Several months ago I told her she could come and stay overnight to spend more time with her granddaughter if she wanted. I never demanded that she help me around the house (she would sometimes do, and I would always be grateful), I cooked her meals and made sure she was comfortable. I thought it worked out nicely.

Couple of days ago, she came over in an extremely shitty mood. She did some weird things like scold my 1 year old for throwing toys on the ground and trying to get her to say “I’m a messy girl”. Later she threw a plush toy to my MIL who threw it back hard in an aggressive way.

Then she started talking to my DH, and somehow the conversation turned to weddings. His cousin is about to have one in September, and DH mentioned that I will not come to the bridal shower. I was not sure if I’d come yet and haven’t told the bride. I’m pregnant and have been feeling extremely tired and nauseous.

Well, MIL didn’t inquire about my reasons, she just started whining “Oh, will you really make me go there alone?? What will I tell others about why my DIL isn’t there??” After that, she went absolutely ballistic: talking about how selfish and ungrateful we are, how we don’t do anything for anyone else (DH was just trying to get her back to college to the program that she said she wanted to do. Later she flaked out and accused him of “forcing her to do go to college”), how he’s a tyrant who doesn’t let me do anything on my own, how it’s such a sacrifice and inconvenience for her to be here… I got pretty angry and started saying “Okay, you are BANNED [from talking about us like this]” but she immediately stormed out and left. Mind you, I definitely would go to the bridal shower if she just asked me to do it for her.

Apparently she only heard the first part of my sentence and thought that I banned her from seeing us forever. That same night, she called the bride and told her that we hate her, the wedding and the bridal shower. So as I was drafting a reconciliation letter, I got a message from the bride that we’re disinvited from the shower and the wedding. I got really upset, but still invited MIL to our daughter’s birthday party next week.

But somehow she still kept calling everyone and complaining how she’s banned from our house. She even called our best friend’s mom who she doesn’t have a very close relationship with. It also came out that she told EVERYONE in the family about my pregnancy, even though I specifically told her I wanted to tell everyone in the second trimester.

Now I’m very angry and unsure of what to do next. I didn’t want to cut her off completely, but maybe I should now that she showed her true colors? Or maybe I should still allow her to come over to see her granddaughter but only for a couple of hours and supervised. There’s also a matter of child support money. She’s about to let several thousands of dollars of child support return to the state because she just never used it (I assume because she lost the card). I’m pretty sure my DH will never see that money, and part of me wonders if the money is the reason she did what she did?