I used to live in East Asia and I found the way they treat kids really strange back then. Now I must admit I'm coming round to the 'just let them be kids' approach.
Still, it's always good to have some boundaries and obviously you need to be more or less on the same page.

My DS is the same age and doesn't get this from his grandparents, but he still wants to be a baby at times. This sort of baby play is totally normal at this age and regressions are to be expected particularly when kids experience big upheavals at home - it's often a sign that they need a bit more reassurance and security. Trying to force him to 'grow up' might actually make this worse.

I appreciate there are cultural differences between you adn your MIL (there's a nice extra layer of complexity for your relationship ) and that's probably a more general issue to be sorted out between you.