Lady Liberty,
Sorry to hear about your MIL ... doncha just wish sometimes a giant fish would pop out of nowhere and swallow a few folks?
Next time you and your daughter both see the starer, why not have your daughter go over solo and say hello and give her a big hug? See if the ole MIL runs from her or not? Or simply say 'hi grandma' and wait to see if she returns your daughter's hello?
Killing mean spirited people with kidness and refusing to stoop to their level is fun. I think what your MIL is doing toward your daughter is plain mean-spirited, there's no reason for it. She's simply taking her anger out on you by ignoring her grandchild.
Stay strong.