I am a vet nurse (live in NZ but trained on OZ) and it is by no way wrong to do this it is perfectly fine! Ignore your SIL I would say it is very responsible to keep her confined till she is older as puppies get into everything all the time esp border collies. We have a pug puppy and she is still locked away in the laundry at night at 4 months old. At least I know where she is and that she ownt chew anything and end up poisoned etc.

Sounds like you are going to be great responsible owners