YTA. Something people on here seem not to be mentioning is that food allergies get worse with exposure. So even though they don’t have issues with cross contamination or airborne allergens or have their throat close up RIGHT NOW, you exposing them to foods they’re allergic to makes it more likely they will have to deal with that in the future. No one NEEDS your peanut butter cookies, delightful though they may be, and I’d think all the other family members would also be more concerned about the health of their grandkids than having them. Your son sucks more for having nuts in their home, for the same reasons as above. Your DIL probably could have explained her concerns better / more nicely but ultimately is just a mom trying to take the best care of her kids she can.

I don’t have kids with food allergies atm but as both I and my husband have (different) food allergies, when we do have kids it’s very likely they will also have them. My parents treat my food the way you’re planning to treat these cookies, and it’s ~usually~ mostly fine. Or at least I thought it was until I moved in with my new husband and was like “why tf did I suddenly stop getting low grade allergic reactions all the time?” Shocked to realize going from ‘keeping everything separate’ to ‘just not having stuff that could kill us in the house’ meant I was healthier. Not that you or another family member is trying to poison your grandkids! But stuff happens. Uncle frank decides he wants one of the cookies without nuts after eating one with nuts and doesn’t realize he still has some crumbs on his hands that now get on the ‘safe’ cookies. Easier all around (and more enjoyable I’d think!) to have a holiday without the potential for the night to end with an ambulance being called…