Forget about their sobriety, they are just inappropriate people. You can certainly tell them this, but it is unlikely to change them. And your conversation (should you choose to have one should not reference “outside a meeting”). Their behavior is nuts whether they are former addicts or not. Your kids are likely right that lower contact is the way to go. You don’t need AlAnon unless you are close enough to somehow be enabling them.
My dad (a drunk) married again after my mom died. New wife told a story to his grandkids about skinny dipping, etc. We are very, very low contact with both of them.
Given these are in-laws, you may need your spouse to drive any conversation (which I personally would not bother with) and be on board with lower contact.