Family matters, especially with in-laws is always odd ground to navigate. Though, I do agree that if something is said, that it Should be from your husband and not you. With that, I have to point out that in our own situation that would mean that it was a lost cause, and I’d just have to process and deal with it. Because my husband hates confrontation more than I ever dreamed possible based on his personality. It would never be worth it in his opinion.
I can totally see your feelings. My father passed away unexpectedly when I was a teenager and my older sister was also still in child-bearing years. Not long after, one of his brothers named his new son after him. I can see why he wanted to, but I really couldn’t comprehend why he would have taken that for himself, since they hadn’t been close in YEARS (nothing bad happened, just that 7 of the 9 of siblings were spread out across the country, the two remaining “local” were my father and a different brother). Especially when there was still every chance in the world that one of my father’s children would want to use it for a grandchild.
If I really felt Strongly about it, the only thing I personally would think about possibly doing is (with my husband’s approval) try to set up the situation again, either with him there prepared to say something or maybe even someone from “your side” (a family member, friend, etc… the younger and/or more vocal/opinionated the better). Try to get the conversation back in that direction (easier if it’s not your husband doing it, since he already knows the planned name) and have the other person say something, “jokingly” and in a light-hearted manner, along the lines of “Well, that will certainly make things odd/confusing at family gatherings if they ever have a [name]Michael[/name] [name]Jr[/name].!” Then, if she mentions the fact that you’re Not using it, that’s a good time to say that actually it has always been an option and is still on the table. In that circumstance, it’s not a situation of you Confronting her about it.
That would be the best way to handle something in MY family. No idea about yours though.
And, on the other hand, if she Does feel strongly about it, that’s something to consider too. You’ve mentioned that your first plan is to name a Possible, [name]Future[/name] son with your husband’s middle name. And then, only if you happen to have another son, possibly use his first name for that one. That’s a lot of “ifs” in the future compared to her “definite” situation in the here and now. I’m not sure of the gender of your first-born, but if it’s a boy and you didn’t choose to use hubby’s fn with him, I can understand her assumption that you weren’t going to use it at all. Or, even if she knows that you plan to pick his mn for the first/next boy that comes around. Usually when people use a parent’s name (especially their fn) it seems to be with the first child if it’s really important to them, because there are no guarantees of any future children. Some will even go so far as giving a first born daughter a form of the father’s name, since there’s no guarantee of future children, or a future boy, especially. It would really be an unfortunate situation if trouble were caused over this now that affects everyone’s relationships in the long term and it turns out that you only end up having more girls, or only one more son. Then no one gets to use the name.