Hi! Thank you for requesting me to help you.
It is very encouraging that your husband is willing to back you up on this situation. It does sound like he is trying to work to keep peace with everyone in the family and that is a natural response. However, since his sister acts out as she does, it may not be possible to make everyone happy in this case.
Is it possible for him to sit down with his mother and explain how his sister has been treating you and others in the family? Let him know to be careful to not just use your situation as the example, as that would make it easy for his mother to make it your issue and not a global family problem. He will need to have concrete examples and let his mother know the damage done as a result. For example, he can point out that his sister has done xyz and as a result, so and so cried or got upset. Make sure she understands that the victim did nothing to provoke the sister and that her behavior is a common occurrence. He can then let her know that he wants to lessen his contact with his sister and that this is non negotiable. He should talk with his mother in a calm non threatening voice so she hears his words and not the emotion behind them.
If you can get any other family members to be a part of this discussion, that is even better. The more sources your mother in law hears from, the more believable it will seem to her.
When your husband shows signs of giving in to his sister, remind him of what you both have gone through with her. Keep some examples in your mind or write them down for both of you to read.
There are also some books that you both can read to help you gain better understanding into your sister in law's behavior and how to help yourselves. One is called The Wizard of Oz and Other Narcissists: Coping with the One-Way Relationship in Work, Love, and Family by Eleanor D. Payson. Another is Freeing Yourself from the Narcissist in Your Life by ***** *****ez-Lewi. Try either Amazon.com or your local library for copies of these books.
Let me know if you have any other questions,