My MIL treats my SIL's son like a GEM. Everything is about him. My other SIL also feel that her own mum is biased. Every time we have family gathering, with all the grandchildren around, the boy gets special attention. Even though she say she is shifting in with us (we have a room well furnished for her), but she only sleepover for 1-2nights/week. Most of the time she sleep at my SIL place with the GEM. I feel that the room for her in my house is 'under-utilised'. I could have converted it into a playroom for my kids. And sometimes when she comes over, she brought the GEM to sleepover too. I don't feel good, kinda feel privacy intruded. Am I normal to feel this way?

There is really one thing called 请神容易送神难 which is very true. If this issue on your MIL bringing her favourite grandson every weekend without even interacting with your kids and it really bothers you a lot, I believe you have the right to decide what you want to do with that room. Morever you have 2 kids, space is also a constraint and definitely a good enough reason why you need the room as well. Be honest with your thoughts with your husband. If your husband keep on saying scared she sensitive, unhappy, dont be afraid to say that you are unhappy too. I had this issue just recently when we accomodate my PILs out of goodwill a short while and reminded thwm when to leave, MIL got depressed (or whatever) complain behind my back that I drove her and FIL back to their home when actually, we are the ones who help and they are the ones who create the mess and not being responsible. I told myself that when people don't appreciate, dont bother and keep on step into your comfort zone, step out and be firm. Your MIL could have also step into your comfort zone during the weekends just hiding in that room, you could have utilize that room and have fun with your kids instead. Ask your husband to speak to your SIL (gem's mum) about the suggested new arrangement too. Remember while reducing conflicts is important, your happiness is more important too.