having worked with kids for years, I'm gonna tell you what any social worker or childcare worker would tell you. Never, ever let anyone around your kids alone who will not respect your wishes as a parent. It's detrimental to your children in the extreme to see their parents will subverted. Tell them from now on they have supervised visitation w/ their frandchildren. To be supervised by you or a person of YOUR choice. Period.
Here here.
They are toxic and will probably be that way till the day they die. (sorry)
If things are as you say, maybe enough is enough. But only you can decide the right course of action. If your parents do not wish to play by your rules, then get some people in there that will enforce them while having a 'visit'. (at your parents expense, of course) I would tell them that maybe one day, when they can respect you as a human being, and listen to you, maybe the supervised visits can stop.