Hi hope
The holidays can be quite stressful when people with BPD are involved so this could definitely also be a factor here. How long has your sister-in-law been exhibiting this BPD-like behavior? Was she always like this as far as you can tell from what your husband has told you about her?
You say the stressful situations seem to be getting more frequent? Could you tell us some more about this? Are you referring to her trying to isolate everyone from her parents are also to other things she does?
I know it is not correct to say that she manipulates situations but this is certainly how it feels as one of the recipients. This has been made more difficult through her mother shifting between enabling her and displaying some BPD traits herself.
The unfortunate reality is that many people with BPD in fact do have manipulative tendencies. They might not always be (totally) aware of the nature of their behavior or might be unwilling to acknowledge what they're doing, but no matter how you label it, the behavior can definitely be very unpleasant.