thats a bit of a tough spot to be in. I dont have any issues with my MIL. My mum on the other hand i guess is just trying to help (as far as she can see) but when she visits now (both living in seperate states now) she will say something in a tone that's a bit harsh or doesn't need to be said e.g "you might want to change her bib now? shouldn't she have a bib on? etc)

I would suggest talking to your MIL. After all if this continues the whole sneak, guilty, comments to hubby it could get worse as years go bye.. by then your DH will be oblivious to it happening, thinks its the normal... you teach people how they are to treat you. Potentially what later down the track with MIL will she sneak and lie about? I know this is just over food, nutrition.. and she i feel does have the best of heart for whats best for Olive (In her eyes) Thats lovely, but she needn't go around youre back like this. If you could put it to her nicely and throw in a "doctor said shes allergic to...", "nurses say Olive has put on weight nicely...". "We both appreciate how much youve been helping with Olive and would love that you keep coming around."
After all, Olive is your child. Dh should support you in your mothering/nuturing role to Olive. As should MIL!
You also don't want this to blow up and have a cranky MIL! Have to agree with Mantaray on picking youre battles! (i grew up with my mum and her MIL (so my nan) always at each others throats. i dont remember them ever saying anything nice, sometimes not even speaking! My dad would always defend his mum(MIL) and it infuriated & saddened my Mum. Kids are very cluely on what's going on! )