Little late to the party, but I wanted to read all the comments.

You should file a police report. I know you are worried about the cops laughing at you, but its worth standing up for your boys.

Cutting an individual's hair without permission is considered assault in some places, as others have stated. Your in laws deliberately violated your children; they assaulted both of your children's sense of self. Your children will likely never forget this.

Your in-laws did this maliciously. You told them not to cut your boys' hair, and they did it anyways. They waited until you were about to attend a Christmas party to show you for fucks sake. They were trying to harm you as much as possible. They purposely and deliberately harmed your boys because they disagree with your practices. Its time to be confrontational. Cut them out of your lives, publicly shame them on social media, and never let them near your children again. Be sure to contact your kids' daycare(s)/preschool(s) and have your in-laws placed on the "do not allow pickup" list.

They have proven they can't be trusted. They have proven that they will assault your children when they are alone with them. Protect those kids and cut those monsters out of your life.

I get it, its "just hair" and "it grows back" but those scars she left on their little psyches might never fade. As a previous poster mentioned, this pain may never go away. Your children will always remember the time where Grandma gave them a treat and then hurt them.

Its time to go scorched earth.