I am 100% on your side - your love and commitment to your son and his welfare come through loud and clear. I also cannot see how any legal battle on the part of your fiance's parents could be successful.
I can understand why you might feel threatened by them because of the way that they acted; but from everything that you have told us, they have little or no power in this situation. If so, you don't have to fear them. But, you could pity them. Grief can make us all act crazy. It doesn't make what they did right, but do you think that could you ever forgive their behaviour in that context? Only you know what kind of relationship they had with your son's mother. But if there was love and caring and respect, then do you think that they would have had a good relationship with your family if she was still alive? If so, do you think that you could give this as a gift to her?
Eventually when your son grows up, he will have questions about his mother. And you will be able to answer many of them. But some of them, you will not. My grandmother passed away many years ago. But when our family gets together and we tell stories about her, the new things and perspectives we find out from other family members, make her very real to all of us, all over again.
I understand that you need to be strong right now, and your anger is righteous, because you are defending your family. And you should definitely consult an attorney as soon as you can. I also understand why you might not feel that you can trust them physically with your son. But, I can say that if you allowed them to see their grandson (have it supervised, if you are anxious), then that is a fair and wise decision - both to any judge that might ever be asked to consider your parenting priorities; and to your son - later when he understands about his mother's family.
Thoughts are with you.