My father in law's wife wants our children to call her "nana" and we don't agree.?

My father in law married his fourth wife about 7 or 8 years ago. She's a nice person and she loves our two children and treats them well, but my husband has never had a close relationship with her. Our kids love her and she occasionally babysits them when we're in a pinch. She expressed early on that... show more My father in law married his fourth wife about 7 or 8 years ago. She's a nice person and she loves our two children and treats them well, but my husband has never had a close relationship with her. Our kids love her and she occasionally babysits them when we're in a pinch. She expressed early on that she'd like our kids (now 2 and 4) to call her nana. We think that she should be called by her first name (just like their other step grandparents are called). We recently confronted my father in law about this and his reaction was pretty awful. I told him that we love her and our kids love her but we're only comfortable with her being called by her first name until our kids can decide for themselves. At that point, they can call her grandma or nana or whatever they want. Regardless, our children know that treating her with respect is non negotiable.

My father in law can't seem to understand this and went so far as to tell me I'm bringing shame to the family. I'm trying to be reasonable, but I'm not really sure how to get through to them. Does anyone have any experience or advice?
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