I'm not sure why inlaws are always approached w/ such suspicion, & the opposing side is always on the defensive & assuming all sorts of things.
Not everyone always has an agenda.
Like others have said, most weddings are "family" affairs - whether or not the bride and/or groom intended for the wedding to be that way or not. '
When you're not having a destination wedding or a specifically very small wedding & only inviting immediate family or a few close friends (a very set guest list), but, instead, planning for 150-200 guests, there *are* going to be people that both set of parents will wish to include... and these guest lists have a way of expanding, despite the best intentions.
In the OP's situation, the groom's mother is expanding her original list - but is ALSO willing to pay for the extra guests.
The bride's mother has some additional people that she'd like to include, but she didn't because she wanted to go w/ her daughter's wishes for a smaller wedding, which I understand.
However, while the bride, in this case, may want a smaller wedding w/ a more limited guest list, the groom does not & would be fine w/ a larger wedding. I think that's key. The groom's mother is not trying overtake the wedding & make any kinds of demands that are out of sync w/ BOTH the groom AND the bride - perhaps the groom wishes to include these guests as well.
And it is the groom's wedding as much as it is the bride's wedding - and this wedding is not being paid for by just the bride's parents.
I think it's fine to have a set number of guests, but I think the bride & groom need to be in mutual agreement about their expectations for the wedding - and it doesn't sound like this bride & groom are.
If I were the OP & there were additional people I wanted to invite that I had initially not included, in this case, I'd talk to my daughter. Because, I can see, how, as the mother of bride, I'd feel a bit miffed if the mother of the groom was trying to include additional guests when I specifically cut my list short. So I understand the vent!
For me, it makes a bit of an awkward situation when the bride wants one thing, & the groom is fine w/ another thing. When the groom is fine w/ his mother adding these guests (& the groom's parents are paying for the additional guests), what do you do? The mother of the bride could just go w/ her daughter's wishes or she could ask to invite some of her additional guests to make the guest list more even.
Another point to consider, of course, is the venue. Regardless of whether or not everyone is willing to pay for their extra guests, will the venue nicely accommodate the extra guests?
And, regarding attendants & family expectations, when our children get married, while I don't expect cousins to necessarily be asked to be attendants, I would like to see our sons have a part in their sister's wedding, & I would like to see our daughter have a part in her brothers' wedding. I'd like to see our older DS as a groomsman in our DD's wedding, & I'd like to see DD as a bridesmaid in our older DS's wedding. (Because there is a pretty big age gap between our younger DS & his older brother & sister, I could see where their particular roles in each other's weddings might be different than bridesmaid/groomsman, but I would still like to see younger DS as a part of his older brother's & sister's weddings, & I'd like to see them as a part of his wedding.)
I also see the dilemma of hurt feelings if one cousin is asked while other cousins are not.