I hear you on disliking inlaws. If my mom did this to my dad I would think it was funny. If my MIL did this to my FIL I would be annoyed. But she wouldn't because she pretends to not hear that we are awake and doesn't come downstairs until several hours later even if she is clearly sitting in her room watching television.
I think you are letting your other feelings cloud your judgement on this one. Is he complaining about being woken up? My grandfather was a grumpy old man to every person on the planet, save me and my sister. We could wake him up (shirtless) and he would nod, half smile, and yawn. A joyous occasion? Maybe not. Still a sweet memory for us? Yes.
Maybe she's hoping it will make him interact with them a little more? I would let her continue to do it and if FIL doesn't like it he can ask her to stop.