I don't think it's a problem for your son to have the same middle name, or even first name, as your nephew. But then I'm Greek, and it's Greek tradition to name the children after their grandparents, so I have a lot of cousins with the same/similar name - Alexander/Alexandra (Lexie), Evelyn/Evgenia, Christopher/Christopher... my dad even has the exact same name as his cousin as they were both named after the same paternal grandfather and unfortunately descended through his male children

Overall I think it's a mark of respect for your mother that both you and your sister are heeding. It could be worse; she could've loved a name you really disliked, and then you'd really be in trouble!