That is really, really bizarre. I agree with those that said not to trust her around your child.
What this kind of made me think of- my cousin's son's grandparents are all really young, none older than 70, and his great-grandparents (my grandparents) are alive on one side, so he calls his great grandparents grandpa and grandma in Russian all of his actual grandparents by their first names.
He's also been freaking out a little over his little brother who's coming in about a month.