You know hun, it really doesn't matter whether you were being melodramatic, or overprotective, or anything else - you are his mum and people need to respect the parent's decisions whether they agree with them or not. It is NOT ok for anyone to blatantly disregard you. Your PIL had their turn at parenting and now it's your turn.

Your DH needs to be very firm with his mum, and let her know that if your trust is breached again there will be no more unsupervised visits - ever. This is the sort of thing that will escalate if you let it go - the lemonade behind your back etc as a PP said. Put your foot down now and stick to it - and yes, it's best coming from your DH. They are more likely to respect what he says.

GL hun. I hope they listen.